Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

PETERHEAD HARBOURS (SOUTH BAY DEVELOPMENT)
ORDER CONFIRMATION BILL (By Order)

Order for consideration read.

To be considered upon Thursday 16 January.

Oral Answers to Questions — FOREIGN AND COMMONWEALTH AFFAIRS

Nicaragua

Mr. John Fraser: asked the Secretary of State for Foreign and Commonwealth Affairs if he will seek to pay an official visit to Nicaragua.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar):: My right hon. and learned Friend has at present no plans to do so.

Mr. Fraser: In the absence of a visit, what steps are being taken by the Foreign and Commonwealth Office to support stability in Nicaragua so that democracy can flourish? In what strong terms has the Foreign and Commonwealth Office protested to President Reagan about the trade, terrorist and psychological vendetta which is being waged by the United States against that country and which can only bring about the reverse of what the President hopes for?

Mr. Eggar: We want Nicaragua to make progress towards genuine democracy and to end its arms build-up and support for the subversion of its neighbours. We very much regret the recent suspension of civil liberties, which we regard as a step in the wrong direction. United States' policy is a matter for the United States.

Mr. Maxwell-Hyslop: Has my hon. Friend made any representations to the Government of Nicaragua about their outrageous anti-humanitarian action in blocking British helicopters from Nicaraguan air space when they were on their way to give urgently needed relief to the victims of the Colombian earthquake?

Mr. Eggar: My hon. Friend shares widespread concern about this matter. I think that the press reports were based on misunderstanding. There was some difficulty in telephone communications between London and Managua regarding the transit of the helicopters.

Mr. Beith: Will the hon. Gentleman confirm that, in answers to me and to others, he said that the forces were well satisfied with the co-operation that they had received

from Nicaraguan authorities with respect to helicopter overflights? How does he envisage the continued American action against Nicaragua helping the essential process of restoring the plural democracy and stability which many people in Nicaragua still believe can be achieved and which were originally part of the objectives of the Nicaraguan revolution?

Mr. Eggar: I confirm the replies that I gave about the helicopters. The Americans continue to support the Contadora process.

Mr. Peter Bruinvels: Is my hon. Friend aware of the daft suggestion of the so-called moderate leader of Haringey council, Councillor Bernie Grant, who said that only Nicaraguan coffee beans could be sold and distributed in the council chamber and around Haringey? Is that not just as daft and offensive as poor old Leicester city council trying to twin with Nicaragua?

Mr. Speaker: Order. That is a bit wide of a visit.

Mr. Eggar: I understand that Haringey council's leader has directed that only Nicaraguan coffee should be drunk in the Haringey civic centre. I understand also that the coffee has a distinctive taste, which may not please the majority of people unless they are used to it. The same could be said about Mr. Bernie Grant.

Mr. Heffer: Does the Minister agree that it is time that the Government, as a friend of the Government of the United States, informed them that Britain believes genuinely in democracy and that they should stop their nonsense in relation to Nicaragua because it is driving that country into the Soviet sphere of influence, which is what happened to Cuba in the past? Will the Americans never learn from their mistakes?

Mr. Eggar: We have our policy with regard to Nicaragua. As I have said, we support the comprehensive and verifiable Contadora agreement, which is based on the 21 Contadora principles. The American Government also support the agreement.

Mr. Foulkes: Does the Minister not see the contradiction in making comments about Nicaragua but refusing to say anything about American policy towards it? Has he noted that President Betancur, who is the architect of Contadora, has said that the greatest single obstacle to achieving peace in central America is continued American support of the Contras? That goes for military as well as financial support. Will the British Government break away from the coat-tails of America for once and condemn financial and military aid to the Contras?

Mr. Eggar: I would listen with a great deal more respect to the hon. Gentleman if he, for once, condemned the recent suspension of civil liberties by the Nicaraguan Government.

South Africa

Mr. Adley: asked the Secretary of State for Foreign and Commonwealth Affairs if he will seek to pay an official visit to South Africa.

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I have at present no plans to visit South Africa.

Mr. Adley: That is a pity, Mr. Speaker. Will my right hon. and learned Friend accept from me that words such as "Parliament", "Government" and "democracy" are an abuse of the English language when applied to a system which excludes the majority of the people from participation therein? May I invite my right hon. and learned Friend to find a form of words to describe accurately a regime which deprives the majority of civil rights, herds them into townships and controls them with armoured vehicles?

Sir Geoffrey Howe: I have no doubt that my hon. Friend expresses feelings that are shared by many —indeed, by most—British people about the system of apartheid. The task is not to condemn it—which I do unreservedly—but to try to promote constructive steps to bring about its early disappearance.

Mr. Nellist: If the Secretary of State were to make a trip to South Africa, would he be congratulating those responsible for the formation three weeks ago of COSATU—the Congress of South African Trade Unions—and on bringing together 34 non-racial independent trade unions representing about 500,000 black workers and workers of other races in South Africa, or, instead of identifying himself with those who create wealth in South Africa, would he be congratulating firms, such as Consolidated Gold Fields which made a profit of £105 million last year by paying the black miners of South Africa £21 to £25 a week? Which of those two institutions would he be most likely to congratulate?

Sir Geoffrey Howe: I should avoid the simplicity of choice which always commends itself to the hon. Gentleman. I would commend those firms which seek to maintain investment and economic activity in South Africa to pay special attention to the European Community's extended code, which encourages them to do more than they have done so far in promoting the rights of black trade unions in South Africa.

Mr. John Carlisle: Does my right hon. and learned Friend agree that the course of action proposed by Labour Members, and, unfortunately, by some of my misinformed hon. Friends, to engage in dialogue with the African National Council is especially dangerous and foolhardy in the light of recent terrorist killings which have taken place within South Africa's borders? Will he condemn those killings by that terrorist organisation and commend the South Arican Government for their restrained response to these incidents?

Sir Geoffrey Howe: We have already made it clear that we deplore the loss of life arising from the recent land mine incidents. We have always condemned violence as a means of achieving political objectives. A suspension of violence would do much to facilitate the dialogue that we all agree is needed urgently in South Africa. We have made clear to the South African Government our condemnation of all forms of cross-border violence.

Mr. Carter-Jones: Does the Secretary of State agree with the view expressed by the hon. Member for Christchurch (Mr. Adley)? As a young aircrew cadet in 1941, many years ago, I served in South Africa. I assure the right hon. and learned Gentleman that, despite what some of his hon. Friends say, the situation in South Africa now, with pass laws, is more vicious than it was 45 years ago.

Sir Geoffrey Howe: I have no doubt that the position compared with 45 years ago has deteriorated in a number of respects, because there has been significant political change in South Africa. While making that point, it is also fair to acknowledge that in recent times the South African Government have embarked upon a policy of limited but specific reform, moving in some respects in the right direction. We need to encourage them to proceed at a much faster pace. Our task must be to promote the dialogue that is essential to a peaceful dismantlement of the system of apartheid.

Mr. Bowen Wells: Does my right hon. and learned Friend agree that once more taking up our position as one of the five countries of the Contact Group that was charged with trying to negotiate a settlement in Namibia would rejuvenate our interest, lead us not to rely solely on American initiatives and put added pressure on the South African Government to enter into a dialogue with the majority populations in both those countries?

Sir Geoffrey Howe: I agree with my hon. Friend that, when looking at the larger South African problem, we should not forget the importance of implementing resolution 435 in relation to Namibia. The Contact Group is one organisation that can contribute to that, and so is the American-led negotiating process. It is certainly an objective that I keep firmly in mind.

Mr. Anderson: Does the right hon. and learned Gentleman not recognise the danger to our foreign position of being so isolated and closely identified with the oppressor, the racists and the fat cats in South Africa? Is not the essential hypocrisy of the Government's position shown by the fact that while in international forums they regularly call for the immediate and unconditional release of Nelson Mandela, should that happen tomorrow they would refuse to meet him because he is a member of the ANC?

Sir Geoffrey Howe: The hon. Gentleman has a capacity for over-simplifying the most complex questions. There is no doubt that the unconditional release of Nelson Mandela would be a major act of national reconciliation within South Africa, which in turn would be an important step towards a more wide-ranging and peaceful dialogue.
The hon. Gentleman must try to bear in mind that his grotesque misrepresentation of the position of the United Kingdom does nothing but harm, not only to this country's position, but to the possibility of change in South Africa.

Middle East

Mr. Ernie Ross: asked the Secretary of State for Foreign and Commonwealth Affairs what steps Her Majesty's Government have taken to assess the degree to which the Arab populations of the West Bank and Gaza regard the Palestine Liberation Organisation as their legitimate representatives in any discussions on the future of the middle east; and if he will make a statement.

The Minister of State, Foreign and Commonwealth Office (Mr. Tim Renton): During my recent middle east tour I met leading Palestinians from the West Bank and Gaza. They made it clear that the Palestine Liberation Organisation is widely regarded by the local Arab population as its representative.

Mr. Ross: Why then will the Government not take a crucial step and recognise the PLO as the sole, legitimate


representative of the aspirations of the Palestinian people by meeting its representatives officially and including them in any further talks on the middle east?

Mr. Renton: As the hon. Gentleman knows, we agreed to the inclusion of two Palestinians in the recent Jordanian-Palestinian delegation that came to London. Unfortunately, in the end, they were not willing to sign the resolution that had been agreed in advance. The question of the recognition of the PLO does not arise, because we recognise states only.

Mr. Sumberg: Will my hon. Friend confirm that unless and until that organisation as a whole—regardless of the views of individual members—renounces terrorism and violence and accepts the right of Israel to exist, there can be no question of any contact or recognition of the PLO by this Government?

Mr. Renton: As I have already said, the question of the recognition of the PLO does not arise. We have urged its leaders to renounce violence and to accept Israel's right to exist within secure and recognised frontiers. It was on that basis that we said we were prepared to meet individual Palestinians who had followed that course.

Mr. Mikardo: Leaving aside the PLO or any other specific organisation, in general is it not nonsense to demand that an organisation, which firmly says that it believes that its problems cannot be solved by negotiation but only by military means, should be brought into negotiations?

Mr. Renton: The hon. Gentleman is simplifying a complex situation in the middle east. The fact is that all those who wish to move the peace process forward recognise that at some stage it will have to involve the Palestinians. A great many Palestinians still regard the PLO as their sole legitimate organisation. It is within that framework that at the moment some middle east leaders are trying to see how the PLO can be associated with discussions.

Mr. Marlow: If the Palestinians are to be criticised for violence and terrorism, should we not likewise criticise the Government of Israel for locking up 12 and 13-year-old children for throwing stones and then not allowing their parents to visit them?

Mr. Renton: We condemn violence and terrorism in the middle east, from whatever side or source it comes.

General Belgrano

Mr. Dalyell: asked the Secretary of State for Foreign and Commonwealth Affairs what representations he has received concerning the Government's reply to the Foreign Affairs Committee's third report of Session 1984–85 on the events surrounding the weekend of 1 and 2 May 1982.

Mr. Eggar: None, Sir.

Mr. Dalyell: Before putting their signature to their response to the Select Committee's report, did Ministers know of the first and more truthful draft of Sir John Nott's speech on 4 May 1982, talking about "attacking" rather than "detecting"? If they did not know, are we to believe that the efficient civil servants of the Foreign Office did not show it to them, and, if they did know, are they not misleading the Select Committee?

Mr. Latham: Who cares?

Mr. Eggar: As one of the hon. Gentleman's hon. Friends says, "Who cares?". Ministers knew, and the officials did not mislead Ministers.

Sir Anthony Kershaw: Is my hon. Friend aware that if, as a result of the events of 1 and 2 May that year, a big British ship had gone down, which the Argentines were doing their best to effect, he would find it much more difficult to answer this question? Secondly, will he bear in mind that the allegations that the hon. Member for Linlithgow (Mr. Dalyell) has been making are totally disproved by the evidence? Finally, will he do what he can to see that the hon. Gentleman stops making such a thumping ass of himself?

Mr. Eggar: I thank my hon. Friend for his comments. I regret that I and others will probably go on trying to help the hon. Member for Linlithgow (Mr. Dalyell) without success.

Mr. Campbell-Savours: Who said "Who cares"?

Mr. Speaker: Order.

Mr. Campbell-Savours: On a point of order, Mr. Speaker. The Minister referred—

Mr. Speaker: No.

Jordan

Mr. Cyril D. Townsend: asked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet the Jordanian Foreign Minister; and if he will make a statement.

Sir Geoffrey Howe: We remain in close touch with the Jordanian Government, but I have no plans at present for a further meeting with the Jordanian Foreign Minister.

Mr. Townsend: Bearing in mind the real risk that King Hussein has taken in trying to get his peace initiative off the ground in the middle east, what action will the British Government take in the new year to get Israel and the United States fully to support that initiative and the concept of exchanging territory for proper peace?

Sir Geoffrey Howe: My hon. Friend rightly identifies the principles upon which progress must be built in the Arab-Israel conflict. He is also right to identify the immense value of the constructive efforts of King Hussein over a long time to achieve progress in that direction. We shall continue to give our fullest support to his efforts, with the United States and other countries.

Mr. Anderson: The Foreign Secretary will know that last week President Mubarak said that the past six months of the peace process have been wasted, and that trying to solve the problem and at the same time trying to ignore the PLO would never lead to a comprehensive peace? Does the right hon. and learned Gentleman accept that view?

Sir Geoffrey Howe: Sadly, the past six months have not seen as much progress as I personally would have hoped towards a possible solution of the problem. That is why we gave as much support as we could to the efforts of King Hussein during that period. We extended our invitation to the joint Jordanian-Palestinian delegation to come here because we have always recognised that the PLO should be associated with negotiations, provided that it renounces violence and is committed to a peaceful settlement along familiar lines.

Mr. Walters: Is any progress being made towards an international conference, as proposed by King Hussein? Does my right hon. and learned Friend agree that such a conference, involving the Soviet Union, the United States and the parties directly involved, such as the Palestinians, is the best hope of making some progress?

Sir Geoffrey Howe: I agree that support for initiatives towards a peaceful settlement, from whichever side they come, should be as broadly based as possible. An international conference might well help in that direction. That is why I am glad that Mr. Peres, the Prime Minister of Israel, made clear to the United Nations his understanding of the need for such an international framework. He has that in common with my hon. Friend and King Hussein.

Israel

Mr. Mikardo: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent visit to Israel.

Mr. Renton: I visited Israel from 12 to 16 December. In my talks there I had a useful exchange of views on bilateral matters and regional and international issues. I also met Palestinians from the West Bank and Gaza Strip.

Mr. Mikardo: I am grateful to the Minister for that statement. During his discussions, did he get any information that he can share with the House about private or public talks between Israelis and Jordanians, and did he draw any conclusions from that information favourable to the furtherance in the near future of the peace process?

Mr. Renton: The hon. Gentleman will accept that if I had private information on that subject during the talks I would not be able to share it with him, much as I would like to do so. It is well known that a great many discussions are going on between capitals in the middle east. It is generally accepted that impetus must be given to the peace process if there is to be progress towards a just and comprehensive settlement.

Mr. Nelson: Will my hon. Friend lend his support, as others have done, to the current rapprochement between Syria and Jordan? Will he lend his weight to ensuring that any direct negotiations between the states of Israel and Jordan, or indirectly through the medium of an international peace process, are enhanced rather than detracted from by any such new axis?

Mr. Renton: When in Damascus, where I met President Assad, I had an opportunity to talk about the new rapprochement between Jordan and Syria with him and with Vice President Haddam. This is a new development in the middle east scene and I strongly hope that it will have a successful influence in advancing the peace process. It is too early to say whether it will go in precisely the manner in which my hon. Friend suggests, but it is noticeable that Syria is now showing considerable interest in playing a part in the peace process.

Mr. Faulds: Would it not be advantageous to the peace process in the middle east, which Chairman Arafat is assiduously trying to pursue, if the Foreign Secretary were to convince the United States Government to abandon their commitment to the Kissinger promise, given at the insistence of Israel, that the US would not accept the PLO? Would it not help the whole peace process if the Foreign

Secretary could urge the US Government to overcome, by whatever means are feasible, the intellectual limitations of the President's comprehension of anything and everything?

Mr. Renton: I find that comprehensive endorsement of Mr. Arafat's stance rather surprising. President Mubarak and King Hussein, especially the latter, have asked Mr. Arafat to make specific declarations on United Nations resolutions about Israel's right to exist within secure frontiers, but Mr. Arafat has not yet made any. Until he adopts a far clearer position in that context, he cannot expect to receive any wider international recognition.

Middle East

7. Mr. Latham: asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a further statement on the peace process in the middle east.

Mr. Temple-Morris: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress being made towards peace in the middle east.

Mr. Renton: We shall continue to support all realistic efforts towards a negotiated settlement of the Arab-Israeli dispute leading to a just and comprehensive peace. It is encouraging that both King Hussein and Mr. Peres have spoken of the possibility of an international framework for peace negotiations.

Mr. Latham: Will not the welcome visit to this country next month of Mr. Peres greatly strengthen British-Israeli relations, and thereby improve our standing in the peace process negotiations? Will my hon. Friend take the opportunity to improve the atmosphere in advance of the meeting by announcing that the practice by which the Foreign Office countersigns Arab trade boycott documents will be dropped immediately?

Mr. Renton: I agree with my hon. Friend in welcoming Mr. Peres' visit to this country next month. It should be an important step in the development of bilateral relations between this country and Israel. On the practice of authentication, which is a standard legal procedure, it does not imply in any way approval of the contents of the documents, because our opposition to the Arab boycott is well known. Furthermore, the vast majority of British firms use the Arab-British chamber of commerce for that purpose.

Mr. Temple-Morris: Does my hon. Friend agree that following the recent Geneva summit, where we hope greater understanding was reached on the question of regional conflicts—I repeat the point made by my hon. Friend the Member for Westbury (Mr. Walters)—the only realistic way towards peace in the middle east is through an international conference, the results of which must be guaranteed by both the United States of America and the Soviet Union?

Mr. Renton: My right hon. and learned Friend the Foreign Secretary has already commented on an international conference in answer to an earlier question. We have never opposed the principle of an international conference, but we want to see that its framework is properly set up and its agenda well drawn so that it has a chance to succeed and to reach positive conclusions. The


framework of the conference at present, which includes who should be represented at it, and how it should reach its decisions, or whether it should be merely for discussions, is one of the main subjects under discussion in the middle east at present.

Mr. Cartwright: Will the Minister confirm that there cannot be any lasting settlement in the middle east which does not recognise the simple fact that the Palestinians are just as entitled to a national homeland as any other people on the face of the earth? Will he take every opportunity of making that simple fact clear in his contacts with the Governments of the United States of America and Israel?

Mr. Renton: We have always maintained the right of the Palestinians to self-determination, and we are concerned about their present conditions in some of the occupied territories. I noted some of them myself when I went to the Gaza Strip at the end of last week. I expressed my deep concern to many leading Israelis about the economic conditions and the difficulties of Palestinians in moving towards self-sufficiency.

Mr. Deakins: What is the Government's attitude to the future of the West Bank and the Gaza Strip?

Mr. Renton: As I have just said in reply to the hon. Member for Woolwich (Mr. Cartwright), we have always recognised the right of Palestinians to self-determination. We accept the principles that have been suggested, for example by King Hussein, to the effect that a form of association with Jordan may be one possibility. However, at the end of the day it must be for the people who live in those lands with their Arab neighbours to work out the right association and framework for themselves.

Mr. Soames: When Mr. Peres comes here next month, will my hon. Friend ensure that he leaves in no doubt the grave anxiety that many of us have about the continuing colonisation of the West Bank?

Mr. Renton: I understand what my hon. Friend says. It fits in with the reply that I have just given to Opposition Members. On my visit to Jerusalem a few days ago I took the opportunity to make clear the anxiety that was expressed to me by leading Palestinians in Jerusalem about the extremely difficult economic conditions, which I saw in Gaza, that many Palestinians suffer at present.

Mr. Janner: Reverting to the Government's authentication of Arab boycott documents, does the Minister not understand that what he calls a standard legal procedure, which is used to justify or in any way to place a seal of approval on an unacceptable practice—in this case, a restriction on the freedom of trade—is unacceptable, if not illegal? Was that not made plain to him when he recently visited Israel?

Mr. Renton: On the hon. and learned Gentleman's second point, the matter was not once raised with me while I was in Israel. On his first point, I should tell him that all that happens is the authentication of signatures. It does not imply approval of the documents' contents or of the boycott. Our opposition to the boycott is well known.

Mr. Baldry: Does my hon. Friend agree that the best chance for an international conference to succeed would be if it was held under the auspices of the United Nations? Will the Government use their position as a member of the

Security Council to seek opportunities to initiate moves in the United Nations towards long-term peace in the middle east?

Mr. Renton: Much as I share my hon. Friend's desire for moves towards long-term peace in the middle east, I am not certain that it is for Britain at this stage to take the initiative in the United Nations for bringing about such a conference. That must rest, above all, with the parties to the dispute in the middle east. Furthermore, I am not wholly convinced that a conference at the United Nations, with many nations attending, would be successful. It is not always the case that the more people who are at a conference, the greater is its chance of success. Often, it is the other way round.

Stockholm Conference

Mr. James Lamond: asked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with progress at the Stockholm conference on security in Europe.

Sir Geoffrey Howe: There has been welcome progress on procedural matters, with agreement on an informal working structure, which has narrowed the focus of the conference considerably. Progress on substance has proved harder to achieve.

Mr. Lamond: In view of the Soviet acceptance of the United States' idea of annual advance notice of military manoeuvres by the Warsaw pact and NATO and its suggestion that it should be extended to air and sea manoeuvres, is there not an opportunity, before the better atmosphere created by the Geneva summit disappears entirely, for us to take an initiative at Stockholm and try to press home the view that a good document should be presented to the world at the end of the conference?

Sir Geoffrey Howe: We shall try to achieve a document that contains specific commitments to adopt confidence-building measures, including those relating to land manoeuvres. If one goes beyond that into sea manoeuvres, one is in danger of going outside the terms of reference of the conference. But we all agree on the need to achieve practical progress on confidence-building measures.

Mr. Forman: Will my right hon. and learned Friend give some other examples of areas of substantial progress to which the Government attach importance? What are the realistic chances of their being achieved at Stockholm?

Sir Geoffrey Howe: Our proposals include provision for an exchange of information about the structure and deployment of military forces, the mandatory observation of regular military activities, site inspection and improved communications between states. They are examples of specific measures which can be agreed within the terms of reference. Progress on such matters would represent a worthwhile achievement after the great deal of work put into the Stockholm conference.

Mr. Healey: Although I welcome what the Foreign Secretary said about progress, at least on the procedural aspect of the discussions, does the right hon. and learned Gentleman agree that, as both sides have agreed that there should be contact between the military staffs of the two alliances in limited areas, and since Secretary Weinberger has already proposed a regular exchange of views between


the American and Soviet military authorities on problems of European security, the Government should now press NATO to invite the Warsaw pact to a general exchange of views on achieving security for both parts of Europe through co-operation rather than confrontation?

Sir Geoffrey Howe: We all share the aim of achieving improved prospects for peace through co-operation and consultation. However, I hesitate to follow the right hon. Gentleman in calling for yet another framework within which such consultation should be conducted. There is no shortage of forums or frameworks, but there has been a shortage of progress. I am glad that Britain has put forward a significant and worthwhile proposal for progress in the MBFR negotiations, which is another example of where we are trying to make headway.

South Africa

Mr. Bowen Wells: asked the Secretary of State for Foreign and Commonwealth Affairs what assessment his Department has made of the implications for its foreign policy generally of Her Majesty's Government's refusal to impose full economic sanctions on South Africa.

The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): The South African issue has wide implications for foreign policy as a whole and we have, therefore, maintained close consultation with other Governments. We are party to common statements of policy, both with our European Community and our Commonwealth partners, which stop short of the imposition of full economic sanctions.

Mr. Wells: Will my hon. and learned Friend confirm that if we are not able to make progress in South Africa over the next six months, and if we do not go along with further sanctions being demanded by our Commonwealth friends, we shall be subject to discrimination by those Commonwealth countries against our own trade?

Mr. Rifkind: There have been differences of view on this subject for many years, and I emphasise that the opposition of Her Majesty's Government to mandatory economic sanctions against South Africa is a view shared not only by the United States but by almost the entire European Community and most of the other countries of western Europe. We are not alone in our view of the matter.

Mr. Caborn: What actions have been taken on the sanctions to which the British Government agreed through the EEC and Commonwealth conferences? We are led to believe that there have been no restrictions on imports of Krugerrands, and that the withdrawing of military attachés, which is part of the EEC agreement, has not been done. How effective have any sanctions to date been, because many people are saying that the Government are bringing us into disrepute in the international community by not even implementing, in the Prime Minister's words, the "teeny weeny" sanctions agreed at the Commonwealth conference?

Mr. Rifkind: The hon. Gentleman is incorrect in part of his question. The withdrawal of military attachés from European countries is not part of the Luxembourg package, although it is under consideration. The South African Government have stopped minting Krugerrands, and there has been no market in Krugerrands for a considerable time.

Mr. Forth: Has my hon. and learned Friend's Department made any estimate of the potential effect on employment in both this country and South Africa if full mandatory economic sanctions were ever applied?

Mr. Rifkind: It is difficult to make a precise estimate, but it is known that there are at least 150,000 black South Africans employed by British companies in South Africa, and there have been estimates of up to 50,000 British jobs that could be directly or indirectly affected by a policy of sanctions.

Mr. Spearing: Is it not a fact that Her Majesty's Government are still not in conversation with the African National Congress? Is the Minister aware that a week ago, in front of the Select Committee, the Foreign Secretary said that he did not know whether the United States was in direct conversation with the ANC? Does he know, and if so, will he tell us?

Mr. Rifkind: I have no reason to believe that the United States Government have been in contact with the ANC.

Mr. Hill: Is my hon. and learned Friend aware that many Conservative Members realise that economic sanctions against South Africa would have enormous reverberations throughout British industry? I make this point in particular in relation to the port of Southampton, where the dockers are still working the South African marine trade because that represents one third of their container traffic. If the Government change their course on economic sanctions, many will be unemployed.

Mr. Rifkind: My hon. Friend is right to draw attention to that aspect of the debate about economic sanctions. The Government's opposition to economic sanctions is partly for the reason set out by my hon. Friend and also because we do not believe that such a policy would succeed in achieving the fundamental and peaceful change that we all wish to see in South Africa.

Mr. Healey: Is the Minister aware that members of the State Department ' have been in continual contact with members of the ANC, and that such contacts took place in the recent visit of Mr. Chester Crocker to Lusaka? Why has the Foreign Secretary refused to allow the British Foreign Office the same freedom to investigate the situation as is allowed by the American Secretary of State to the American State Department?

Mr. Rifkind: We have always emphasised that we look forward to the day when the African National Congress will renounce a policy of violence. We believe that the Commonwealth initiative, agreed at Nassau, which called for dialogue between black and white South Africans in the context of a suspension of violence on both sides, ought to be an incentive to the African National Congress as well as to the South African Government to desist from any acts of violence, in the interests of reconciliation.

Mr. Beith: What incentives are the British Government giving to the South African Government to respond at all to the Commonwealth initiative, since they know that even if the initiative is a failure there will be no escalation whatsoever of sanctions by the British Government? Is it not a relief that at least the banks, on commercial grounds, are prepared to impose economic sanctions on South Africa?

Mr. Rifkind: I must point out to the hon. Gentleman that the South African Government have already said that they are prepared to consider contacts with the Commonwealth group that was set up at the Nassau summit. That is an encouraging sign. We believe that the Commonwealth group, which includes representatives from all sections of the Commonwealth, could make an important impact in persuading all parties, including the South African Government, of the need for very early dialogue and reconciliation in that country.

Mr. Winnick: asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the latest representations by Her Majesty's Government to the South African authorities on developments in that country.

Mr. Rifkind: On 11 November we participated in a demarche on behalf of the 12 European Community countries expressing to the South African Government our deep concern about restrictions imposed on the press, violent police methods of riot control and the continuing arrests of political and trade union leaders. On 3 December we issued a statement about the killings at Mamelodi, in which we called for a full inquiry.

Mr. Winnick: Is the Minister of State aware that we welcome the fact that at least one or two Tory Members of Parliament are speaking out on this issue, unlike the hon. Member for Luton, North (Mr. Carlisle) and one or two others, who seem to act in the House of Commons as representatives of the South African Government? When will the Minister realise that only when sanctions are applied by this country and by our partners in the European Community will the South African authorities understand that we are serious in opposing their vile system of government in that country?

Mr. Rifkind: I am not sure why the hon. Gentleman always insists upon attributing bad faith to everybody except himself. He ought to realise that people can honestly hold different opinions from his own without justifying the rather nasty comments that he insists upon making on every occasion. As for sanctions, the hon. Gentleman must appreciate that there is a common desire to see peaceful, fundamental change in South Africa, but there is a genuine difference of view as to whether mandatory sanctions would bring it about.

Sir Peter Blaker: Does my hon. and learned Friend agree that if there is to be any chance of achieving a solution to the problems of South Africa which is fair to all races in that country and which does not involve immense bloodshed, it will be by encouraging a dialogue between the people of South Africa? Does he further agree that it is at least not self-evident that economic sanctions are likely to achieve that process?

Mr. Rifkind: Not only is it not self-evident, but we know from experience that whenever a policy of mandatory economic sanctions has been applied it has conspicuously failed to achieve even a limited degree of success.

Mr. Pike: Bearing in mind that all methods, over many years, to try to persuade the South African Government to end their abhorrent policy of apartheid have failed, should not the Government be saying that now is the time to introduce economic sanctions? Should we not take an

example from the history of this country and remember the deprivation that was suffered in the cotton textile industry when efforts were made to end slavery in America?

Mr. Rifkind: I must emphasise to the hon. Gentleman that a slow but definite process of reform has begun in South Africa. For example, a recommendation has been made by the President's Council that the pass laws should be repealed. If, as is widely expected, the South African Government endorse that recommendation it will represent a fundamental move in the right direction. It is exactly reforms of that kind that we should be encouraging.

Mr. Andrew MacKay: Does my hon. and learned Friend agree that while it is helpful to make strong and constructive representations to the South African Government, experience shows that mandatory economic sanctions are completely counter-productive and only do damage to this country?

Mr. Rifkind: My hon. Friend is right to draw attention to that fact. Many of those who call for economic sanctions emphasise their view that it would be worth making a short sacrifice of a few months, or even a year or so, to achieve the end of apartheid. The sad fact, as we saw in Rhodesia, is that even after 15 years it was not economic sanctions that brought about change in that country.

Iran-Iraq War

Dr. McDonald: asked the Secretary of State for Foreign and Commonwealth Affairs what assurances of the prospect of a peaceful settlement of the Iran-Iraq war were given to him by the Iraqi Foreign Minister during his visit.

Sir Geoffrey Howe: The Iraqi Deputy Prime Minister and Foreign Minister gave clear assurances during his discussions in London with my right hon. Friend the Prime Minister and myself that Iraq was seeking a peaceful settlement of the conflict and remained ready to negotiate with Iran.

Dr. McDonald: Did the right hon. and learned Gentleman take the opportunity of those discussions to raise two issues with the Iraqi Deputy Prime Minister and Foreign Minister: first, the fact that Iraq will no longer be a safe haven for terrorists such as Abu Nidal; and, secondly, the question of the continued oppression and torture by Iraq of its citizens?

Sir Geoffrey Howe: In the course of the meetings that the Iraqi Foreign Minister had in this country, the first issue was certainly raised, both specifically and generally. In addition, I assure the hon. Lady that the Government are always concerned about violations of human rights and that the Iraqi Government are fully aware of our close concern with that matter. That was reaffirmed during the visit of Mr. Tariq Aziz to this country.

Mr. Temple-Morris: Does my right hon. and learned Friend agree that an end to this detestable war depends far more on Iran than it does on Iraq? Will he explain how he can justify his sanction of the export of Chieftain tank engines for use by the armed services of Iran in this war?

Sir Geoffrey Howe: I assure my hon. Friend that the Government are conscious of the need to maintain our policy of supplying to neither side any defence equipment that would significantly enhance the capability of either


side to prolong or exacerbate the conflict. Very little equipment of any sort—except some vehicle spares that were supplied under an old pre-revolutionary contract—has been sold recently to Iran.

British Council

Mr. Freud: asked the Secretary of State for Foreign and Commonwealth Affairs what recent representations he has received concerning the budget of the British Council; and if he will make a statement.

Mr. Eggar: We have received representations from the council itself.

Mr. Freud: Will the Minister explain why the British Council, of all overseas organisations, has been singled out for punitive cuts of 20 per cent.? Has he presented to the Treasury the British Council's claim for an extension of activities to Indonesia and China? Why is his Department so publicly supportive of the British Council but will not fight for it in private?

Mr. Eggar: We cannot anticipate the publication of the public expenditure White Paper for next year. We have taken on board the representations that the council has made to us about Indonesia and China. We are extremely conscious of the good work that the British Council does, but it cannot be exempt from public expenditure restrictions.

Sir Anthony Kershaw: Does my hon. Friend agree that it would be a good idea to have a thorough going review of the value of cultural diplomacy to British policy abroad?

Mr. Eggar: We have that matter under consideration.

Mr. George Robertson: May we be assured that the Government will not hide behind the transfer of funds from UNESCO membership to aspects of the British Council's work and will face the real obligation to increase the amount of mixed money in the British Council's budget? Is the hon. Gentleman aware that only by expanding that budget will the British Council be able to do the highly important job of promoting Britain abroad, a task which he and the House know the council does extremely well?

Mr. Eggar: The whole House recognises the extremely valuable work that the British Council does. UNESCO money will be independent of any other settlement made with the British Council for the next year.

United Kingdom High Commissions and Embassies

Mr. Nicholas Baker: asked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with the commercial performance of high commissions, and embassies of the United Kingdom abroad.

Sir Geoffrey Howe: Yes, Sir. The promotion and protection of British commercial interests, employing about a third of our front line manpower overseas, is highly valued by the business community. About 90,000 British business men are in touch each year with embassies, high commissions and subordinate posts during overseas visits. Market information inquiries have risen nearly 40 per cent. since 1979.

Mr. Baker: I thank my right hon. and learned Friend for that answer. Will he accept that some business men tell

me that the performance of our embassies and high commissions abroad is variable? Will he do what he can to get more business men to come into the diplomatic service to work in our embassies and high commissions and will he try to improve the industrial experience that our diplomats receive?

Sir Geoffrey Howe: Every organisation is capable of improvement. We operate an interchange of staff with the private industrial and commercial sector, necessarily on a modest scale. All officers who take up such commercial appointments for the first time attend a course to qualify them, to which contributions are made by private firms and trade. We recognise the need to do all that we can in that direction.
The tributes paid to the service far outweigh the complaints. All complaints are investigated and we welcome contructive criticism. In the 12 months to the end of October this year six complaints were received, but there were over 300 tributes. That is a fair balance.

Mr. Pavitt: Will the Foreign Secretary publish in the Official Report the excellent results obtained by the high commission in Jamaica? Will he commend the high commissioner for his efforts in all trading aspects between the United Kingdom and Kingston?

Sir Geoffrey Howe: I shall certainly record the hon. Gentleman's view. It is right that such a tribute should be passed to those concerned.

Viscount Cranborne: Does my right hon. and learned Friend agree that part of the answer is in the hands of the business men themselves? Does he further agree that when contrasted with the efforts of many of our competitors, particularly the Japanese, British business marketing efforts abroad tend to be rather pathetic?

Sir Geoffrey Howe: It is not my function to endorse such a general condemnation, but I agree that the job of selling has to be done by business men. The diplomatic and commercial services can play only a supportive role. The private sector has a crucial part to play for itself.

Mr. Foulkes: Will the Foreign Secretary confirm that our embassy in Santiago is doing nothing to promote the sale of Centaur armed vehicles to that repressive regime and that no export licences will be granted for any further vehicles?

Sir Geoffrey Howe: Our embassy in Santiago is following the policy clearly laid down to offer no arms sales in support of the repressive measures in that country.

Nuclear Test Ban Treaty

Mr. Strang: asked the Secretary of State for Foreign and Commonwealth Affairs what consultations he has had with experts in the field of seismology on the verification of a nuclear test ban treaty.

Mr. Renton: The United Kingdom's contribution to the work of the conference on disarmament on the verification of a nuclear test ban treaty draws upon advice from seismologists employed by the Ministry of Defence. In addition, officials are regularly in touch with seismologists outside the Government services; for example, United Kingdom experts have participated in the ad hoc group of scientific experts under the auspices of the


conference on disarmament, which includes representatives from a variety of countries, including the USA and the USSR.

Mr. Strang: Will the Minister have the honesty to admit that the technology is now available to detect nuclear explosions down to the militarily significant level of one kiloton? Is it not a fact that before the breakdown of the last comprehensive test ban treaty negotiations the Soviet Union agreed to the placement of seismic stations on its territory?

Mr. Renton: It is a question not of honesty, but of a great number of scientologists—[Interruption.]—sorry, seismologists. As the House will know, the headquarters of scientology is in my constituency. The opinion of many seismologists—some employed by the Government but many not, some British and many international—is that the question of verification is not yet solved. Furthermore, it is inaccurate to claim that the 1977 to 1980 trilateral negotiations, to which the hon. Gentleman referred, were near completion. There were many practical aspects, including verification, on which agreement had not been achieved at the time the negotiations ceased.

Mr. Forman: Is my hon. Friend aware that many laymen who support the objective of a comprehensive test ban treaty are beginning to feel that the scientific community in more than one country is merely putting up obstacles to the reasonable proposals made recently. Will he seek to give the idea a greater political push?

Mr. Renton: I listened to what my hon. Friend says with great care, but the fact of the matter is that this is an area where it is essential that there should be not only verification measures that work but confidence on both sides that the verification is working. If there were to be non-compliance and that was not verified, it could lead to a breach in our national security, which would have serious consequences.

Mr. Healey: Is the Minister aware that the diplomatic correspondent of the Daily Telegraph, who has always proved a most reliable conduit for Foreign Office news, recently stated that there was now no scientific obstacle to verification and that the only obstacle was political, by which he meant the toadying of the Prime Minister to President Reagan? Therefore, will the Government support the early recalling of the conference on a comprehensive test ban agreement, since the Prime Minister herself said that she greatly regretted its being broken off last time?

Mr. Renton: I well realise from previous exchanges that the right hon. Gentleman is setting himself up as an amateur seismologist, but he is not much better as a seismologist than he was as an economist. The fact of the matter remains, as I have said before, that there is a genuine and serious division of scientific opinion. We have suggested that a committee should be formed at the conference on disarmament at which detailed questions about verification could be studied, and it is a matter of regret to us that the Soviet Union has not accepted that suggestion and has not moved forward with it.

Mr. Dalyell: On a point of order arising directly out of questions, Mr. Speaker. The Under-Secretary clearly said earlier that it was one of my hon. Friends who said, "Who cares?". In fact, it was none of my hon. Friends; it was his hon. Friend the Member for Rutland and Melton (Mr. Latham). I wonder whether that could be put right. In answer to the substantive question, the people who care are those who care that the House of Commons should be told the truth.

Mr. Latham: I readily confirm that that is correct, Mr. Speaker. Had you permitted an interruption earlier I would have said so then. It was I who made that comment.

Mr. Speaker: Order. I am sure that Hansard will have noted that exchange.

Mr. Dalyell: Further to my point of order, Mr. Speaker. It is not for the hon. Gentleman to apologise; it is for the Minister who used—

Mr. Speaker: Order. I cannot be responsible for that. It will be noted.

Mr. Marlow: On a point of order arising out of questions, Mr. Speaker. It is only a small point of order, but I am asking you for your help and assistance. You may remember that in distant days gone by we used to have European questions for 20 minutes. There are some 20 questions on European issues on the Order Paper today. Europe is responsible for our agriculture policy, for our trade policy and for a growing basket of other policies. It is only right and proper that we should have the ability, not just to question the Foreign Secretary after Council meetings, but to ask substantive questions on the subject. I wonder whether anything can be done about that.

Mr. Speaker: Order. I seem to remember that in the not too distant past there were exchanges about this and it was agreed through the usual channels that EC questions should go in with foreign affairs questions. If the hon. Gentleman wishes to have that changed, his right course would be to talk to the Leader of the House.

Mr. Dalyell: rose—

Mr. Caborn: On a point of order, Mr. Speaker. I should like your guidance and perhaps some information on a question on the Order Paper. Has there been a request from the Secretary of State for Transport to make a statement on—

Mr. Speaker: Order. I have not had that, but it does not arise directly out of questions today.

Mr. Dalyell: On a point of order, Mr. Speaker. Very honourably and truthfully the hon. Member for Rutland and Melton (Mr. Latham) admitted that he was responsible. I would not pursue the matter further, but it would be gracious of the Minister to at least admit that he made a mistake; no doubt a genuine mistake, but, nevertheless, a mistake. Would it not be nice if Ministers were a little gracious?

Mr. Speaker: Order. It is very nearly Christmas.

Mr. Eggar: If it helps the hon. Gentleman, I apologise. I did mishear; the comment came from another direction. I apologise.

Foreign Affairs Council

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): With permission, Mr. Speaker, I should like to make a statement about the meetings of Community Foreign Ministers that took place in Brussels on 16 and 17 December. I took part in the meeting of the Intergovernmental Conference which finished at midday yesterday. My right hon. Friend the Minister for Trade and the United Kingdom Permanent Representative represented the United Kingdom at the subsequent meeting of the Foreign Affairs Council.
The Foreign Affairs Council discussed Commission proposals for a negotiating mandate on the renewal of the multi-fibre arrangement. Further discussions will take place at the Foreign Affairs Council in January.
Ministers also reviewed progress in negotiations to adapt the EC-EFTA agreements to take account of enlargement.
The Ministers of the Ten as well as Spain and Portugal issued a statement on East-West relations following the meeting between President Reagan and Secretary-General Gorbachev in Geneva. A copy of the statement is being placed in the Library of the House.
The Council considered a draft regulation adapting the regional fund to take account of the enlargement of the Community. The new regulation should be ready for adoption in the near future.
Following discussion at the European Council it was agreed to set up a committee of scientific experts to recommend co-ordinated action to combat cancer.
The Intergovernmental Conference completed its work. Discussion centred on those points which, following the decisions taken at the European Council, required clarification or further work.
We agreed the political co-operation treaty, with a small secretariat, on the lines that the United Kingdom proposed before Milan. We reached agreement upon the framework in which to set the political co-operation treaty and the amendments to the EC treaty in a way which preserves the juridical separation between the European Community treaties and the political co-operation Treaty. We achieved the necessary clarifications on the internal market and the European Parliament to complete the agreement reached without affecting the substance of what was agreed by the Heads of Government in Luxembourg.
The Italian and Danish Governments continue to have overall reserves on all the texts. The United Kingdom maintained its reserve on the text on the working environment. The Presidency will now collate the texts that have been under discussion for examination by the official group of legal and linguistic experts. I will, of course, make the texts available to the House as soon as we have them in final form.
The changes agreed represent worthwhile improvements in the operation of the Community. The agreements to complete the common market by 1992, to speed up decision-taking, to strengthen our co-operation in foreign policy and to ensure that our efforts in research and development are geared to the exploitation of a growing market will help to achieve objectives that we have consistently pursued. We welcome this as a useful step

forward for the Community. The agreements now reached are, of course, subject to the approval of national Parliaments.

Mr. George Robertson: It is clear from that statement how little the whole treaty amendment exercise has achieved in reality. Does the right hon. and learned Gentleman agree that, compared with the fanfares and rhetoric which began the discussions, what has emerged is a pretty feeble pile of paper? If this is history, it is historic only in the sheer time taken to do so little for so many of Europe's people. With more than 15 million jobless in Europe, the Community budget facing disaster yet again and the regional and social funds locked up, is the right hon. and learned Gentleman aware how sad it is that the treaty amendments are so profoundly irrelevant to Europe's real problems?
Why are the British Government, alone among the 10 nations in the Community, still holding out against encouraging improved standards of health and safe working conditions for workers? Why does this country always take the worst of the Community and reject the best?
Now that the right hon. and learned Gentleman has agreed to the new treaty on foreign policy co-operation, what have his colleagues in Brussels had to say about Britain's disgraceful decision to leave UNESCO against the unanimous advice of our European partners?
Article 1 of the Luxembourg summit communiqué on the obscure subject of "cohesion" says that the Community will
reduce disparities between various regions".
How is that to be done with the freezing of the social and regional funds and the losses that this country will suffer as a result? On radio yesterday the Prime Minister spoke about her view of the European Community being pragmatic and based on what it can do for Britain. How can we benefit if the present financial shambles in Europe continues?

Sir Geoffrey Howe: When he asks questions on a topic of this kind the hon. Gentleman portrays a wide and superficial knowledge but with very little insight.
On political co-operation, the hon. Gentleman may be surprised to learn that UNESCO was not mentioned once in the last two days. Our position in relation to the proposal for the adoption of regulations affecting health and safety in the working environment consists simply in our belief that that should be subject to a provision for unanimity, at least in respect of firms of small and medium size. It is necessary to proceed with the utmost care when imposing obligations, even of the most benign kind, on small and medium sized firms if one is not to damage employment—the very thing about which we are all concerned.
As to the treaty amendments, I find it very difficult to judge whether the hon. Gentleman's position is to regret the fact that the conference achieved such a small range of treaty amendments or that it took place at all. We recognised the case for progress in the Community and believe that that could have been done without the Intergovernmental Conference. We are glad that it has now been done with that conference. It would be nice to hear something welcomed by the Opposition.

Sir Frederic Bennett: On political collaboration, can one assume that the conference greeted the decision by the five countries—including the Socialist


Governments of France and Sweden—to cease their prosecution of Turkey for breaches of human rights in view of progress towards democracy in that country? Does that open the door to further economic and political collaboration between the EEC countries and Turkey?

Sir Geoffrey Howe: My right hon. Friend will appreciate that Sweden was not represented at the proceedings yesterday, but he is right to draw attention to the importance of the decision reached by the five complainant Governments to bring to a conclusion the civil rights proceedings against Turkey. That is a recognition of the progress that has been made in that direction in Turkey, and I hope that it will open the way to similar moves within the European Community.

Mr. A. J. Beith: As the Foreign Secretary has declared himself in favour of Euro-activity and against Euro-pessimism, does he recognise that some majority voting, a stronger Parliament and enlarged regional and social funds are all essential if we are to tackle problems in the Community such as the CAP that cause its unpopularity among some sections in Britain?

Sir Geoffrey Howe: We have certainly been in favour of extending the opportunity for the Parliament to play a constructive role in the Community while reserving the last word to the Council, and that has been achieved. We are certainly in favour of the extended use of majority voting, particularly when that can promote the more effective application of a single internal market, while proper attention is paid to important national interests. There is something to be said for looking favourably at the scope and scale of activity in the regional and social funds, but that can be sensibly achieved only within a framework of effective budget discipline and, above all, effective control of the previously burgeoning expenditure on the CAP. That decision does not require treaty changes but a sustained application of political will—[Interruption.]—and in support of that determination by the Government I am always delighted to have the enthusiastic commitment of my hon. Friends on the Back Benches.

Mr. Teddy Taylor: Despite the welcome lack of progress on the undermining of the veto, is it true that the Secretary of State has agreed the European Act, whose preamble describes the ultimate aim of member states as being European union and commits Britain to the formal objective of realising that goal in a new treaty article? Why on earth did the Secretary of State agree to those silly words when the Prime Minister has made it abundantly clear that Britain does not support all this nonsense?

Sir Geoffrey Howe: I am dismayed that my hon. Friend, with his sophisticated insight into these matters, should be so preoccupied with that misconception. The title of the European Act, which brings together the two treaties agreed yesterday, explicitly avoids reference to European union. The references in the text are to
complete progress towards our agreed goal"—

Mr. Teddy Taylor: That is the preamble.

Sir Geoffrey Howe: The agreed text includes the preamble to which I am referring. The goal that has been agreed is ever closer agreement between the peoples of Europe. As we signed the treaty in 1957, my hon. Friend must catch up with that. I made it clear yesterday, as

British Governments have done on many occasions, that union in the sense envisaged in the treaty is a continuing process. It was agreed that we should not speak of the establishment of a European union. Even my hon. Friend cannot ask for a better outcome.

Mr. James Lamond: Did the right hon. and learned Gentleman have the opportunity to have a few words with the negotiators on the multi-fibre arrangement, whose mandate was renewed, to tell them that employers and unions alike in the textile and clothing industry are worried because of the story that the civil servants who are negotiating are pressing hardest for a liberal regime in the coming MFA? That is contrary to the impression given in debate in the House a few months ago. The right hon. and learned Gentleman said that he was concerned about jobs and small businesses being destroyed. Is he aware that the jobs of many tens of thousands of workers in this industry will be in jeopardy unless there is proper control of clothing and textile imports?

Sir Geoffrey Howe: My right hon. Friend the Minister for Trade adhered firmly throughout yesterday's discussion and the discussion on the MFA to the line that he outlined in the House on 9 May this year. He made it plain then that a renewed MFA is bound to be more liberal in some respects if it is to afford improvements in access to the European markets of the poorest developing countries. That wish is expressed and supported by both sides of the House, not least by the Labour party. The Community has to balance liberal opportunities for textile industries in the Third world with sensible safeguards for Britain's textile industry. That is the objective set by my right hon. Friend the Minister for Trade. It is a difficult objective to achieve, but he will stick at it.

Sir Anthony Meyer: Is it not clear that the only hope for advance in British industry, especially British aerospace, lies in closer co-operation with a completed Common Market? Should not my right hon. and learned Friend sweep aside considerations of ideological purity and throw his weight firmly in favour of a European solution to the Westland problem?

Sir Geoffrey Howe: I agree that it is important in every context to take account of the advantages that can be secured by effective co-operation on a European scale. It is not for me to sweep aside any considerations of ideological purity in the decision that must be taken by Westland.

Mr. Nigel Spearing: The right hon. and learned Gentleman has stated that he expects any treaty to amend the treaty of Rome to be ratified by an Act of Parliament. Does he have any thoughts on the method of ratification for a possible treaty on political co-operation?

Sir Geoffrey Howe: A distinction must be drawn—as the hon. Gentleman well appreciates with his expert knowledge on this matter—between the provisions amending the European Community treaty and the political co-operation treaty. The political co-operation treaty is not, of course, part of Community law. It does not require legislation in the United Kingdom, but the House will have a full opportunity to consider it.

Mr. Eric Forth: What improvements does my right hon. and learned Friend expect in the speed and quality of Community decision taking if there is a greater involvement of the European Parliament?

Sir Geoffrey Howe: To improve the consultation procedure, we want to make it more possible for the European Parliament to make an effective contribution without extending the process. A clear time limit is provided for in the proposed treaty change. If a procedure fails to come to a conclusion, the proposal will lapse. This is similar to the way in which we handle matters in the House. The Presidency is committed to reviewing speedily at the beginning of next year the Council's internal procedures to deal with First reading provisions in the same way.

Mrs. Gwyneth Dunwoody: Will the right hon. and learned Gentleman be kind enough to tell us whether his attitude would change if the Italian Government were to veto the existing arrangement? Would he then be prepared to see a faster move towards closer union, or are Her Majesty's Government to stay with the existing position, where they appear to have tried to give away the veto unsuccessfully?

Sir Geoffrey Howe: If we had been trying to give away the veto, which we were not, and we were unsuccessful, as the hon. Lady implies, she would have nothing to worry about. We were seeking to achieve a conclusion of advance British and European interests in the working of the Community. We arrived at a conclusion which commended itself broadly, in respect of which the Italian Government have so far maintained their reserve. We hope that reserves will be withdrawn so that it is possible for the entire Community to agree on the substance of the matters agreed last week.

Mr. David Harris: My right hon. and learned Friend has mentioned that my right hon. Friend the Minister for Trade was at the meeting. Can he confirm my impression that my right hon. Friend raised the question of the serious crisis in the tin industry? If so, what was the outcome of his intervention?
Will my right hon. and learned Friend take it from me that our decision to withdraw from UNESCO—at the time that it was announced in the House I was in New York seeing the Secretary-General—caused not a ripple in the United Nations headquarters?

Mr. George Foulkes: Rubbish. I made a phone call.

Sir Geoffrey Howe: I shall leave the hon. Gentleman to resolve his financial problems with my hon. Friend outside the House. My hon. Friend's contribution makes the point that I had made to me about the feelings in the United Nations on our UNESCO decision.
My hon. Friend is right to be concerned about the tin crisis. We are in regular touch with our Community partners and with the Commission about it. The issue was raised yesterday. There are differing views on how to proceed to a resolution of the crisis. We are continuing to make strenuous efforts in the Community and elsewhere to achieve a settlement that would permit an orderly resumption of tin trading on the London metal exchange.

Mr. Dave Nellist: It has cost the British people £1·5 million a day to maintain our membership of this big business club over our period of

membership. When will British unemployed workers move off the bottom of the league of social payments as a proportion of their former earnings compared with every other country in the Common Market?
In his discussions on international trade, did the Secretary of State explain to the other Ministers why the British Government did refuse to impose economic sanctions against South Africa? Did he tell them that it has nothing to do with the 150,000 jobs that they claim would be affected by the imposition of sanctions? He has not made that claim about the five million who the Government have put on the dole. Did he explain that the Government have refused to impose sanctions because Britain controls 45 per cent. of foreign investment in South Africa, and that it is the profits of his mates that are up for grabs in South Africa? That is why the Government will not intervene.

Sir Geoffrey Howe: One can only express one's sympathy with the hon. Gentleman if his insight into these matters is founded on such narrow restrictions as those which he has sought to outline.

Mr. Nicholas Budgen: Will my right hon. and learned Friend make an immediate statement to the House about the important and new information, which he plainly has, which enabled him to describe expenditure on the CAP as recently or previously burgeoning?

Sir Geoffrey Howe: The important information which I have is to the effect that the share of agriculture in the 1986 budget is substantially below its share for the current year and that the provision for 2·5 per cent. growth that is contained in the guidelines has been respected. I understand that nothing that we are able to do in respect of the CAP will be enough for my hon. Friend, but I beg him to accept that we are applying dramatic energy to try to achieve improved operation of the agriculture policy. I value his support in that respect, and I would value his insight as well.

Mr. Dennis Skinner: In view of the continuing financial crisis in the Common Market and the £252 million that the British taxpayer had to find to bail it out this year, will the Foreign Secretary seriously consider the question of the financing of those political parties in the Community that pass money to bankrupt parties in this country? For example, does he know that during the last financial year a group known as European Liberals, many of whom are to the right of Ghengis Khan, provided the British Liberal party with £340,000—and that is mentioned in its accounts—even though there is not a single Liberal party member in the Assembly? Is it any wonder that only recently the Liberal party allocated its premises to the National Front?

Sir Geoffrey Howe: The hon. Gentleman has identified a very tangled web indeed. I should have thought that he would not be so ready to condemn international co-operation on political matters when his party, from the days of the Socialist International onwards, has proclaimed a belief in international political co-operation.

Mr. Tony Marlow: As I am sure that my right hon. and learned Friend would be as concerned as I would be if the reference to European union in the preamble were to be used by the Commission as a


moral lever for opening the throats of the British public so that it could throw down them more distasteful Euro medicine, will he reinforce his already robust remarks by saying, "Yes, we agree to a common market, but we do not agree to a united Europe"?

Sir Geoffrey Howe: I think that some of my hon. Friends should become less preoccupied with textural matters of that sort. If we go back a long way, we will remember that in 1976 the Hague European Council, at which this country was represented by the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), proclaimed that our objectives were the consolidation of Community solidarity and the establishment of European union. The treaty of Rome proclaimed as an objective the achievement of an ever closer union of the peoples of Europe.
If hon. Members concentrated on the realities and the practicalities, they would realise that we stop far short of the imaginary nightmare that they conjure up from these sort of words.

Mr. Eric Deakins: Does the draft treaty on political co-operation contain any procedures to enable other European states to join in the treaty, and, if not, why not?

Sir Geoffrey Howe: It contains provisions that make it plain that the treaty is not meant to be exclusive or to preclude consultation and co-operation with other European democratic countries. For example, we all belong to organisations such as the Council of Europe.

Sir Peter Tapsell: If the hon. Member for Bolsover (Mr. Skinner) was right in what he said—and I have no information on the subject—does my right hon. and learned Friend agree that he has raised a very serious point? We cannot have British political parties financed by foreign political parties.

Sir Geoffrey Howe: Now that my hon. Friend has added his formidable weight to the point made by the hon. Member for Bolsover (Mr. Skinner), I shall be very happy to give it more earnest consideration.

Mr. William Cash: Is my right hon. and learned Friend aware that there is a Council decision on tariff quotas which I understand is not to be published in its final form, even though it has already been considered by the Council? As far as we know, it will never be made available to anybody either in this House or elsewhere, even though it has been considered and made as a Council decision.
Will my right hon. and learned Friend look into that matter during the Intergovernmental Conference and tell us whether it is a new procedure and whether it will continue in the future?

Sir Geoffrey Howe: In so far as I heard my hon. Friend, I believe that to be a matter that I should draw to the attention of my right hon. Friend the Minister for Trade, who is in the House but had similar difficulty in hearing what he said. We shall read it in Hansard tomorrow.

Mr. Tam Dalyell: Will the Foreign Secretary expand on his interesting and probably welcome statement about scientific experts from Europe combating cancer? Does it mean that European money will be

available? Will it be given to centres of excellence such as the Max Planck institute, Lewen university or the universities of Edinburgh or Cambridge?
If we want to fight cancer, is it not important to reinforce centres of excellence? Will the right hon. and learned Gentleman ask his officials to give him Sir James Gowan's foreword to the Medical Research Council' s committee report which shows how funds are lacking for alpha projects? I welcome the initiative, but let us ensure that it is done in the most efficient way.

Sir Geoffrey Howe: I shall see that the experts who advise the Government on these matters have their attention drawn to the points raised by the hon. Gentleman. Their actions, which I described in the statement, to achieve greater co-operation on a Community basis consist of the appointment of experts to work together, and I trust that they will take account of the hon. Gentleman's point.

Mr. Nigel Forman: My right hon. and learned Friend said in his statement that the Government have put a
reserve on the text on the working environment.
Will he tell the House why that was done and what, in fact, it is?

Sir Geoffrey Howe: I have tried to answer that question in reply to the Opposition Front Bench. The Opposition Front Bench has had the advantage of studying the text, which I accept my hon. Friend may not have had. The proposal will give the Council powers to make legislative provision in a Community sense, affecting matters connected with health, safety and other areas in the working environment. It is our belief that, although that is a perfectly respectable objective to consider on a Community basis, it must be considered carefully with proper voting provisions. The proposal may achieve benevolent objectives, but it could, if too burdensome, detailed and restricted, threaten the creation of jobs, particularly in small and medium-sized enterprises.

Mr. Jeremy Corbyn: Will the Foreign Secretary tell the House what discussions took place about American policy in Central America and the American invasion of Nicaragua, which has a democratically elected Government'? Can the right hon. and learned Gentleman also say what discussions took place about the British Government's slavish support for United States policy in that matter, despite claiming to support the Contadora process, which other European Governments support? Can the right hon. and learned Gentleman give any guarantee that the EEC aid that is being sent to some Central American countries will not be used to support Central American Governments who deny human rights to their citizens, in particular El. Salvador, Guatemala and Honduras? Will he give an assurance that no money will go to support such Governments?

Sir Geoffrey Howe: There was no discussion of that topic. When that was discussed recently, it was on the basis of the common policy adopted by the Community countries at the meeting that took place with the Contadora countries in Luxembourg approximately a month ago. There is a great deal more common ground in Community policy on this matter than the observations of the hon. Member for Islington, North (Mr. Corbyn) suggest.

Mr. Tony Baldry: Does not the constructive and practical progress that has been made


towards the creation of an internal market demonstrate the capacity and determination of the Community to promote trade in a better way and to secure real and lasting jobs for the benefit of many unemployed people in this country?

Sir Geoffrey Howe: Yes, Sir.

Mr. Neil Hamilton: In the course of his important discussions, did my right hon. and learned Friend seek to secure agreement from his colleagues that the British consumer should be able to derive the same advantages at Christmas as the Russian consumer and be able to purchase top quality EEC beef for 15p a pound?

Sir Geoffrey Howe: I did not discuss that topic, although the Agriculture Council will be meeting tomorrow. No doubt the topic will be generally dealt with there.

Rate Support Grant (England)

The Secretary of State for the Environment (Mr. Kenneth Baker): With permission, Mr. Speaker, I shall make a statement about the 1986–87 rate support grant settlement and selective rate limitation for local authorities in England.
I have laid before the House today the rate support grant report for 1986–87, together with supplementary reports adjusting grant for 1984–85 and 1985–86. Copies of the reports, the rate limits and other explanatory material being sent to local authorities today are available in the Library and the Vote Office.
The main feature of the settlement is the abolition of expenditure targets and the associated grant penalties. That decision has been warmly welcomed by the great majority of local authorities. It is a major simplification of the grant system.
Our aim is still to bring local auhority current spending down to a level that the economy can afford. Though we have a system that gives low spenders a fairer share of grant, we are maintaining strong pressure, even on them, not to take advantage of the abolition of targets to increase spending in real terms.
The aggregate of Exchequer grant will be the same cash sum —£11,764 million—as the figure originally provided for this year. But it is about £400 million more than the amount of grant now being paid for this year, because local authorities are forfeiting £400 million through holdback. The grant which central Government will pay to local government next year will be about 46·5 per cent., which is about the same as the figure for this year after allowing for holdback.
Provision for local authority current expenditure has been set at £22·25 billion. That figure takes no account of the additional provision of £1,250 million over four years, which has been offered if satisfactory agreement can be reached on school teachers' duties and salary structure. My right hon. Friend the Secretary of State for Education and Science has already said that, subject to the passage of the Education (Amendment) Bill, he is ready to bring forward £37 million from that sum in 1986–87 in order to secure the supervision of schools at midday.
I announced provisional grant-related expenditure assessments—GREAs—on 28 October. They incorporated various technical adjustments. The cities will benefit from changes in the concessionary fares and social work GREAs. The remote shires will gain from changes in the education GREA.

Mr. Robin Maxwell-Hyslop: It is a fiddle.

Mr. Baker: I have considered carefully the many representations made to me since that announcement, but have decided that my original proposals should stand. Individual authorities' GREAs will, however, differ somewhat from the figures issued in October as a result of more up-to-date information.
I am also changing the grant system so that the impact on the rates of every extra pound an authority spends or saves will be much sharper than before. As in past years, the pressure will become more severe if the authority's expenditure exceeds a threshold set at an average of 10 per cent. above GREA.
The important message is that—

Mr. Maxwell-Hyslop: It is a fiddle.

Mr. Baker: —for all but a handful of authorities, more spending will result in less grant and less spending will result in more grant.
As usual, there are arrangements to limit the impact of distributional changes on individual authorities' grant entitlements. I have also ensured that the changes to the grant system required by the abolition of the Greater London council and the metropolitan county councils are broadly neutral in their overall effects. If successor authorities carry out their inherited tasks more efficiently, their ratepayers will benefit.
I refer to the rate limitation. In July my predecessor announced the list of 12 authorities selected for rate limitation in 1986–87, together with expenditure levels. In most cases they represented a cash freeze on 1985–86 budgets. Seven of the 12 authorities have now applied to me for a redetermination of their expenditure levels—Camden, Greenwich, Hackney, Lewisham, Lambeth, Liverpool and Newcastle. I have considered their applications carefully and in each case increased the expenditure level somewhat, though overall by substantially less than they themselves had sought.
I am today proposing rate limits for those authorities. They have until January to make representations to me about a higher limit if they think it appropriate. Again, I shall of course consider carefully any representations they make.
In five of the authorities, ratepayers should see a cut in their rate bills next year. In all 12, the rates will be lower than they would have been without capping. In 1985–86, rate capping has saved ratepayers in those areas subject to rate limitations hundreds of millions of pounds. They will have good cause to thank us again in 1986–87.
My right hon. Friends the Home Secretary, the Secretary of State for Education and Science, and the Secretary of State for Transport are to make separate announcements about precept limitation for the new joint authorities in the metropolitan areas and London.
If local authorities budget sensibly and economically, the average rate increase next year should be no higher than this year, and it could be lower. Higher spending will mean sharply higher rates. That is why local government must stand firm in its wage negotiations, and most implement the many savings identified by the Audit Commission.
My proposals for 1986–87 represent a major advance. I have abolished targets which many of my hon. Friends pressed me to do. I have improved GREs. I have established a clearer relationship between what councils get and what they spend. I have built on the success of rate limitation in 1985–86. I commend them to the House.

Dr. John Cunningham: Is the Secretary of State aware that we welcome the fact that he, not the chairman of the Conservative party, is making this statement? However, does he accept that we cannot welcome what we understand to be the case—that additional information about some cities and towns in Britain has been provided to the press outside the House, and is not in the statement.
Is the Secretary of State confirming that the difference between the settlement announced today and what local authorities need to maintain the present level of their community service provision is a shortfall of £1·25

billion? That is the gap between what local authorities say they require just to maintain existing services and what the Secretary of State is offering. Is the right hon. Gentleman aware that we cannot accept that the total grant should be reduced to less than 47 per cent. of local authorities' expenditure from almost 62 per cent., inherited by the Government in 1979? Is he further aware that that reduction, now for the seventh successive year, has meant a loss, in accumulated terms to local authorities, of over £16 billion?
Has not the Secretary of State just announced that once again local authorities are to be penalised for spending in excess of their grant-related expenditure assessments, which are being used for a purpose for which they were never intended? Is not the right hon. Gentleman overriding the proper, considered judgment of all locally elected councils in doing so? If, to quote his statement,
more spending will result in less grant
how can he claim to have abolished targets and penalties?
Is the Secretary of State aware that authorities in the metropolitan areas and the GLC still do not know the cost to them of the Government's abolition proposals? How long must they wait before they are told the size of the bill that they will have to pick up, especially given the fact that the Government are now putting through the House legislation to enforce fixing of a rate by 1 April, which we do not oppose. That is a serious problem for many authorities of all political persuasions.
We note the increased expenditure levels given to the seven councils applying for redetermination under the Rates Act. We welcome those concessions, as far as they go, but even they fall short of what those seven authorities believe they need.
Is it not the case that the settlement takes no account of the eventual and urgent need to settle the dispute about teachers' pay? What allowance are the Government making to resolve that problem, as the right hon. Gentleman has produced a settlement that falls so far short—£1·25 billion short—of what local authorities believe is necessary? May I draw his attention and that of the House to the fact that in the 1970s, the Labour Government, to take account of the Houghton settlement on teachers' salaries, increased the rate support grant from 61 per cent. to 66 per cent. of expenditure to give teachers their long overdue salary award? Why do not the Government take the same approach?
In his statement the Secretary of State referred to his announcement on 28 October, when he increased the share of GRE to the inner cities by half of 1 per cent. of the total. Does he not recognise that that is a pathetic increase when set beside the consistent withdrawal of support from the partnership and programme authorities, which totals more than £427 million since 1981–82? Is not the implication of that a continuation of the massive problems of our inner cities and urban areas?
I return to what the Secretary of State said about the application of the Rates Act. Will he tell the House and the local authorities before what date he believes they should apply to him for discussions about maximum rate levels? Does he accept that we cannot agree with the continued fragmentation of the announcement, splitting up announcements by the Department of Education and Science, the Department of Transport and the Home Office, to obscure the full implications of what is


intended? Will he deny that those arrangements will lead to further cuts and higher rates and fares in many local authority areas?
Will the Secretary of State justify what he said about local authority wage levels in the very week when the low pay unit has said that as many as 30 per cent. of local authority manual workers receive wages that are only at the poverty level? We in the Labour party cannot accept that.
Will the Secretary of State confirm, as the hon. Member for Tiverton (Mr. Maxwell-Hyslop) seemed to be saying, that what he has announced today is that he intends to maintain pressure on authorities spending below GRE, that is, below what is required to maintain even average services in education, highways and social services and thereby denying people, particularly in those shire counties, the benefit of a decent service, even under Conservative administrations? [HON. MEMBERS: "Too long."]
Will not the statement lead inevitably to higher rates, even if the provision of services can be maintained? Are not the right hon. Gentleman's words about rate levels meaningless when set beside what his predecessor said this time last year, when in the past year rates have risen by more than twice the level of inflation, on average? Is it now not also the case that there is nothing in the statement at all that addresses the real and deepening problems of our inner city communities? For that reason, above all, it should be condemned.

Mr. Baker: The hon. Gentleman has asked me many questions, and I shall try to answer as many as I noted.
I refer first to teachers' pay. This point is of importance to local authorities. Exceptionally, if, as a result of the teachers' negotiations for next year, it is agreed that extra provision is made, the education GREA will be increased and there will be a proportionate increase in Exchequer grant. That is to say, there will be more money on the table, if a proper package for teachers is agreed, covering structure and conditions as well as pay.
The hon. Gentleman chided me about the proportion of grant provided by the Government. I remind the hon. Member for Copeland (Dr. Cunningham) of the basic figures. The proportion which central Government will be making available to local government next year is about 46·5 per cent. and that roughly corresponds to this year's figure. The hon. Gentleman will understand that in cash terms that will be roughly the same as this year.
The hon. Gentleman asked about the inner cities. A week ago the House debated the inner cities and we were pressed to increase support for the inner cities. The rate support grant settlement that I have announced will increase the grants for towns and cities by about £227 million. That takes into account the extra costs of providing social services in the inner cities, and concessionary fares. I would have thought that the hon. Gentleman would welcome that change.
The hon. Gentleman's first question concerned the overall level of provision. The hon. Gentleman said that, next year, local authorities wanted to spend £1·25 billion more than I had allowed for. That is quite true and I have agreed only £0–5 billion. Once again the Opposition Front Bench has become the spokesman for high levels of municipal spending. The Labour party would give in to

every demand for spending made by town halls. If I had given in to town hall proposals it would have meant either higher rates or higher taxes. When the hon. Gentleman presses me to agree to that level of expenditure, he is pressing me to agree to substantially higher rates and higher taxes. The settlement that I have announced today has set out how much authorities can get.
The hon. Gentleman asked about the date on which the rate-limited authorities should make their representations. I would hope that they would be able to make representations to me by 22 January. The whole thrust of this settlement is that if authorities can make economies and savings rates will go down. It is for the councils to find the savings. The hon. Gentleman knows that the Audit Commission has pointed the way. The commission has shown that councils could save over £130 million a year through better vehicle fleet maintenance, £50 million through the cleaning of secondary schools, £200 million through more efficient purchasing and £30 million through more economical refuse collection. When such savings are possible, ratepayers are right to be fed up with weak councils who will not make them.

Mr. Francis Pym: As someone who has been highly critical of the target system, I welcome the demise of that unfair methodology. Will my right hon. Friend the Secretary of State make sure that the allocations to local authorities bear a closer resemblance to the needs that have been established by these local authorities? My right hon. Friend has a message this afternoon for local authorities, "Spend more and the grant is less, spend less and the grant is more." Can my right hon. Friend say how he has taken that into account in the 1986–87 allocations in rewarding the thrifty, economical, low-spending shire counties, which have demonstrated the good management that they are able to give? How has my right hon. Friend fulfilled the undertakings previously given to these counties?

Mr. Baker: I am grateful for my right hon. Friend's support. We have abolished penalties, targets and holdback. I appreciate the interest he has taken in these matters, especially with regard to Cambridge. Low spenders, under the system announced today, will get their rewards. We have capped the gains of the low spenders, which they will get as a result of this change, just as we have safety-netted the grant losses falling to the higher spenders. The cap on gains will disappear over a period of possibly two or three years. This will allow low spenders to get the full benefits of the change.
Cambridgeshire will get a £74 million grant this year. If we had retained the existing system, it would have fallen to £65 million. The grant that is available to Cambridgeshire next year depends on its level of spending and will be either £75 million, £71 million or £70 million. I remind my right hon. Friend and the House that the level of grant depends entirely on the authorities' levels of expenditure.

Mr. Simon Hughes: Can the Secretary of State confirm that, although he said there has been an increase in cash terms or at least a standstill in cash terms, the reality is that there is a reduction in real terms? This will not alleviate the needs of local authorities. Can the Secretary of State confirm that, although targets have been abolished, there is still


equal complexity and uncertainty? Those who administer local authority finance fear that under this system there will be less opportunity for prediction than in the past.
How can the Secretary of State explain the phrase that has governed his allocations—less spending means more grant—in terms of the inner cities and urban areas? Such places have more need and should have more grant. The two views seem to be incompatible. Does the Secretary of State agree that the figures confirm what everybody has been asserting for months? The gross aggregate allocation to inner cities, the rate support grant and all other funding has been declining gradually and will continue to decline with this settlement and for each year since this Government came into office in 1979.

Mr. Baker: The hon. Member says that the position is less predictable now than in other years. If one has targets and penalties one can say quite specifically what the grant will be. In future the grant will depend on the level of expenditure of the individual authorities. I have set out in the papers available to Members three estimates of different levels of expenditure and grant that local authorities can get. I cannot agree with the hon. Gentleman's last statement that money has been taken away from the cities. In regard to his own local authority of Southwark, it received a grant of about £45 million. In the figures available in the Vote Office the hon. Gentleman will find that next year Southwark, assuming that it will take on responsibilities from the GLC, could get either £66 million or £60 million. This year, as a result of the changes in grades, there is a flow of about £227 million to the towns and cities.

Sir Ian Gilmour: Does my right hon. Friend the Secretary of State agree that, as far as I can understand his moderately illuminating statement, it has serious implications both for the rates and services of the shire counties, especially Buckinghamshire? Although I appreciate that the financial difficulties of Buckinghamshire county council are not the fault of my right hon. Friend, they are not the fault of the county council. Can my right hon. Friend say what steps he will take to alleviate its problems?

Mr. Baker: My right hon. Friend will have heard what I said about teachers' pay in reply to the hon. Member for Copeland (Dr. Cunningham). It is of considerable importance to shire counties. Buckinghamshire's grant this year is £54 million. If the present system had continued, it would have got only £46 million. It has the chance of getting as much as £59 million, £52 million or £50 million. That cannot be represented as a major withdrawal of grant.
It is in the hands of local authorities to determine how much grant they get. If they can make savings—possible savings have been mentioned by the Audit Commission—their grant will increase. If low spenders continue as such, they will get higher grants, and if high spenders overspend, the money that they sacrifice as a result of overspending will not go to the Treasury, as is the arrangement this year, but will remain in the pool available for local authorities. It is therefore possible that low spenders will get even higher grants than have been estimated in the figures that I have announced.

Mr. Allan Roberts: Will the right hon. Gentleman explain the following contradictions? He

represents a party which believes in public expenditure cuts, but is claiming today that he is not really cutting public expenditure. He says that he is giving more money to inner cities, but he is cutting the total grant while promising his right hon. and hon. Friends that he is giving more money to shire counties. Where will the money come from? He and the Government claim to be on the side of ratepayers, yet he has launched an attack on ratepayers. Without cuts in Government grants, rates would today be 25 per cent. lower. The settlement represents a major attack on ratepayers, especially owner-occupiers, and comes on top of a moratorium on improvement grants for owner-occupiers. Moreover, there has been a fourfold increase in the number of owner-occupiers who, because of the Government's economic policies, are defaulting on mortgage payments.

Mr. Baker: The hon. Gentleman says that rates could be much lower as a result of higher grants. Where would the money for higher grants come from? It would have to come from taxpayers. It cannot come from anyone else. I have allowed for an increase of about 4·5 per cent. in the overall level of local government expenditure and provided roughly £500 million. The Opposition Front Bench want an additional f1·25 billion, which is possible only as a result of a massive increase in taxation or a massive increase in rates. There is no other way in which to finance it. The hon. Gentleman mentioned cities. His local authority—Sefton—gets £43 million in grant this year. It could get £56 million, £55 million or £54 million next year.

Mr. Jack Straw: That is because of abolition.

Mr. Baker: It includes an increase for abolition expenditure. GREAs for all towns and cities have been increased in recognition of the higher cost of social services and concessionary fares.

Mr. Charles Irving: I am sure that both sides of the House are extremely grateful to my right hon. Friend for the simple clarity of his statement and the marvellous way in which, 10 minutes before we are to discuss the settlement, we receive 200 pages of simple explanation. As I am an ordinary hon. Member who is not equipped to deal with already complicated circumstances that are unnecessarily complicated still further, can I ask a simple question? I have gone through the technical data used in the calculations for 1986–87. I have dealt with the GREA and multiplied it by the rateable value plus the population and the expenditure estimate. I have looked at the local government finance rate support grant document—the third paper. I shall not go through the others because they are just as simple. I have taken column I with the grant-related expenditure and coupled it with the abatement multiplier and the published multiplier. All I am suggesting is that it would be simpler to be told in simple language what the hell the rate will be in Gloucestershire next year.

Mr. Baker: I have great sympathy with what my hon. Friend says. Mr. Edward Pearce, the political writer, said that on these occasions every occupant of my office has to indulge in the verbal sludge of municipalspeak. My hon. Friend indulged in it as well. Cheltenham's grant this year is £1·8 million. Next year, it could qualify for £2·6


million, £2·4 million or £2·4 million. My hon. Friend's local authority will receive more grant next year than this year.

Mr. Terry Davis: As the Secretary of State says that he wants the effect of the abolition of metropolitan county councils to be neutral, will he now answer the question that I put to him on behalf of a delegation of Birmingham Members of Parliament a week ago? Will he confirm that Birmingham city council will take on some additional responsibilities next year as a result of abolition of the West Midlands metropolitan council? Will he also confirm that, as a result of taking on those additional responsibilities, Birmingham city council will receive less money than it would otherwise have received? If the Secretary of State does not agree with that allegation, will he explain why his civil servants have failed to contact the city treasurer to clarify the point, as he promised that they would?

Mr. Baker: The hon. Gentleman came to see me with certain other Birmingham Members of Parliament last week. They were discussing estimates. The figures that I have announced today show that the benefit to Birmingham city council due to abolition is 3·7p, which means that its grant is £165 million. Allowing for the allocation of new responsibilities following abolition, it could qualify for grant of £201 million, £185 million or £180 million.

Mr. Maxwell-Hyslop: How does the Secretary of State acquit himself of the charge of sheer political cowardice by reducing the percentage of Government grant instead of reforming the base of local government taxation, to which this party—to which he is meant to belong—has been committed for many years?
Can he deny that he is deliberately fiddling the GREA formula to transfer funds from rural areas to the towns? To be fair, the same happened when the leader of the Social Democratic party was a Cabinet Minister in the Labour Government, which the Liberal party supported, which robbed the Devon rural areas of £49 million. How can the Secretary of State deny that his fiddling of the GREA formula this year is to transfer money in support of the aboliton of the metropolitan councils? Does he not realise that, in so doing, he has destroyed credibility in the GREA system just as he has destroyed credibility in himself as Secretary of State?

Mr. Baker: As for the first question which my hon. Friend asked, I intend to introduce a Green Paper after Christmas—

Mr. Maxwell-Hyslop: A Green Paper?

Mr. Baker: My hon. Friend must be patient. We would like to hear the views of the country and people other than my hon. Friend. It will be a Green Paper on the reform of rates. Regarding my hon. Friend's point about the transfer from shires, this year Devon—

Mr. Maxwell-Hyslop: What about district councils?

Mr. Baker: I shall come to district councils because the message is even better for them.
This year the county of Devon will receive a grant of £148 million. Under the existing system it would have received a grant of £142 million. Next year it stands to

receive a grant of £155 million, £151 million or £150 million. Therefore, Devon is likely to end up with a larger grant.

Mr. Martin Flannery: That is enough.

Mr. Baker: That is pretty good, but just wait.
My hon. Friend's district council is Mid-Devon. This year its grant is £1·1 million. It would have decreased by £50,000 under the old system. Under the new system it is likely to end up with a higher grant next year than this year.

Mr. Robert Parry: Will the Secretary of State now accept that since 1979 the Government have stolen more than £350 million in rate support grant from the city of Liverpool? What will next year's allocation be? Will it not be peanuts compared with this year's allocation? Will the Secretary of State say when he intends to meet leaders of Liverpool city council to discuss those serious problems?

Mr. Baker: In response to a request from the chief executive of Liverpool city council I have already said that I am willing to meet the leader of the council or a delegation from it. The council has set a budget target for 1985–86, so next year it will not forgo grant because of holdback this year. Liverpool city council was one of the city councils that asked for a redetermination of its expenditure level because it is to be rate-capped next year. If I had agreed with its request, there would have been a 27 per cent. rate increase next year. I did not agree with it, and as a result there will be a 15 per cent. rate increase next year.

Mr. John Cartwright: As the Secretary of State commends the Audit Commission, does he recall the harsh comments that it levelled against the waste inherent in a centralised bureaucratic system of control of local authority expenditure? Does he accept that the welcome abolition of the target system would have been even more welcome if he had not retained a tough penalty system based on GREAs, about which local authorities of all political persuasions are worried? Finally, is not the conclusion of the settlement further confirmation of the Government's policy of shifting the burden of paying for local services from taxes, which are basically fair, to rates, which are inherently unfair?

Mr. Baker: Next year the contribution of central Government to local government will be 46·5 per cent., the same as for this year. I thank the hon. Gentleman for his comments on simplification. Next year the system will be much simpler than that this year because grants, penalties and holdback will not exist. Many hon. Members may feel that GREAs are imperfect, but in one way or another the Government must assess the relative needs of individual authorities. As a result, the inner cities can get GREAs per head as high as £800, whereas the shires get GREAs of about £400. That is an attempt to recognise that the social needs of some of our towns and cities must be met through this system.
The hon. Gentleman will know from the figures that Greenwich will, in effect, have a rate standstill because of rate capping next year. However, if the borough of Greenwich had been allowed to proceed as it planned, there would have been a rate increase of 22 per cent.

Mr. Charles Morrison: The extra help for our inner cities is welcome. However, at a time when the Chancellor of the Exchequer is talking about scope for tax cuts, not increases, it is a matter of great regret that Treasury parsimony has not allowed my right hon. Friend to treat the shire counties as well as he should have done. On what does he base his belief that rate increases next year will be similar to those for this year, taking account of the fact that the Association of County Councils believes that rate increases in the shire counties could be as high as 20 per cent. in some cases, and will average about 15 per cent?

Mr. Baker: Those were estimates well before the event. During the past 18 months I have learnt that estimates made before the rate support grant settlement are usually much higher than the rate settlements themselves. This year my hon. Friend's county of Wiltshire will receive a grant of £84 million. Under the old system it would have received £79 million. Under the new system it will receive £86 million, £84 million or £83 million. The figures for Wiltshire which my hon. Friend submitted to me show that the county appears to be planning significant growth in expenditure. I was not surprised at that because it is not unusual when a council has the misfortune to be hung and falls prey to Liberal indecision.

Mr. Chris Smith: Will the Secretary of State tell the House whether the people of the borough of Islington, exercising their unfettered power through the ballot box, or the Secretary of State and his civil servants doing the Treasury's bidding in Whitehall, know better what the needs of my constituents are and what expenditure should be used to provide services for them?

Mr. Baker: As the hon. Gentleman follows these matters, he will know that successive Governments—any change in the rating system will involve future Governments doing the same—make some assessment of the relative needs of different areas. That must be done impartially. Opposition Members say that I have moved the GREA system, but the consultative process before I changed GREA lasts between six and nine months, and I take representations from the towns, cities and shire districts.
As the hon. Gentleman knows, Islington council did not seek redetermination. Next year the rate decrease for his constituents will be 18 per cent.

Mr. John Wheeler: My right hon. Friend's statement will be greatly welcomed by the people of London, especially responsible borough leaders. How will his settlement and proposals affect London, recognising its special needs, and, particularly, the largest rate-paying authorities—the cities of Westminster and of London?

Mr. Baker: As I have made clear, we have not used what is called the London lever, which can be pulled to divert grant into London. Instead, we have reassessed the GREAs across the country, and taken particular account of those for social services and concessionary fares. As a result, all towns and cities will benefit, not merely London or only towns in metropolitan areas. I, like all my predecessors who have held this office, have had to make decisions about the proportion of grant going to different areas. That is done only after the most lengthy process of

consultation. The arrangements that we have made for London will allow all the different London authorities to take over the responsibilities of the Greater London council. The level of rates in London will depend essentially on the economies that can be made by the successor authorities to the GLC.

Mr. Tony Banks: Does the Secretary of State think that it is right that he or his Department should leak comprehensively the details of the rate support grant settlement and give newspapers far more information than he has provided at the Dispatch Box today? In view of the question from the hon. Member for Westminster, North (Mr. Wheeler), will the Secretary of State tell the House whether the report in today's Financial Times that at least £100 million of Government grant is to be switched from England's rural areas to London for the 1986–87 settlement, in advance of the 1986 borough council elections, is correct? Is that not a Government bribe to stop the disastrous consequences that—[Interruption.] No, we are grateful for every penny that we can get. Is it not a bribe to try to stop the Conservative party suffering badly at the ballot box in 1987? Will the right hon. Gentleman admit that he has not the faintest idea about how much money boroughs will have to pay out to compensate for the shortfall in GLC funding?

Mr. Baker: The hon. Gentleman is insensitive and has the brass neck to talk about allocation of money on political grounds. As chairman of the GLC he knows that during the past few months the GLC has been dishing out money to its political friends in inner London on an unprecedented scale. I repeat that I have purposely not used the London lever. The needs of all towns and cities have been assessed through GREAs. London will benefit by about £220 million, the metropolitan areas by about £80 million and other towns and cities—

Mr. Jeff Rooker: Who gets less?

Mr. Baker: The money comes from the holdback operating this year. That is why the allocation has been made.

Sir Anthony Grant: Cutting through the arcane arithmetical dexterity so splendidly exposed by my hon. Friend the Member for Cheltenham (Mr. Irving), will my right hon. Friend, as a reasonable man, lay his hand on his heart and confirm that his proposals regarding Cambridgeshire cannot be used in future as an excuse for mismanagement by the Liberal-controlled Cambridgeshire county council?

Mr. Baker: Yes. In the recognition of towns and cities, the grant for the city of Cambridge will increase. This year, South Cambridgeshire, which covers most of my hon. Friend's constituency, will receive a grant of £324,000. Under the existing system, next year his council would have dropped out of grant and received nothing, but now it is likely to receive more than £200,000.

Mr. Peter Hardy: Will the Secretary of State confirm that he is maintaining the Government's share of local authority expenditure at about 30 per cent. less than it was when Labour was in office? Does he accept that that means that business and industry bear an extra £2,000 million burden? Will he quantify the number of jobs that that has cost? How does he reconcile that with


the fact that the Secretary of State for Social Services is to impose on the poorest of the poor a burden of £70 in contributions to the rates?

Mr. Baker: The progressive reduction in the amount of grant from the Exchequer to local authorities was mentioned in the debate a week ago and has been mentioned many times in the past. The biggest cut was made by the former Labour Chancellor of the Exchequer from 1966 to 1969. There was nothing sacred about 1969. We have reduced the grant progressively because we believe that that enhances local accountability.
The hon. Gentleman's implication is that the towns and cities have been starved of expenditure. I remind the hon. Gentleman of the point that I made yesterday and last week. In the seven most deprived inner cities of Britain, local government current expenditure was £700 million when we came to office, and this year it is £1·4 billion. That is double the amount and an increase in real terms.

Mr. Richard Holt: My right hon. Friend will recall that at the beginning of the pantomime season last year, so graphically illustrated by my hon. Friend the Member for Cheltenham (Mr. Irving), there was a dispute between us about the size of Cleveland. An hour and a half ago I checked on that. Twelve months later his Department has still not resolved that dispute, so I have no idea how it could resolve the rate support grant. Will he repeat his promise of last year that when he discovers that his Department has got it wrong, the shortfall, which was denied last year and will be denied next year, will be made up to Cleveland?
Will he also examine the Rate Support Grant (Reduction in Rateable Values) (Specified Percentages) Regulations 1985? In Langbaurgh, which has lost the ICI and Shell plants, the rateable value has fallen, but it will be swept up in the 2·5 per cent. safety net. Cleveland as a whole will not be. My constituency will receive a grant of 1·7p because of the 2·5 per cent. safety net, but it will lose 2–8p because Cleveland does not fall into the net.

Mr. Baker: The answer to my hon. Friend's first and second questions is yes; to the third that I will re-examine the matter; and to the fourth, that I shall check his figures.

Mr. Allen McKay: Is the Minister aware that his announcement is a recipe for disaster in local government? It will mean a vast increase in the rates, a vast reduction in services, or both. How does the Minister propose to overcome the fact that, by abolishing the counties, the services granted under section 137 will be passed to local authorities, but not the money to deal with them? The recalculation of section 137 will mean that Barnsley will receive only a third of the present grant. What will happen to the fire service? The Minister's predecessor gave a categorical assurance that the fire service would not be reduced. What can the Minister say about the hundreds of men who will be forced to leave the fire service because it cannot be paid for? What about the fire cover that is essential for those areas?

Mr. Baker: Later today my right hon. Friend the Home Secretary will be announcing the expenditure level and rate limits for successor authorities with regard to fire services. Undertakings given during the debate will be fulfilled.
The Widdicombe inquiry is examining section 137, and I do not wish to anticipate its recommendations. I appreciate that some areas are in difficulties because of the recalculation. I am considering the matter.

Mr. Patrick Cormack: Does my right hon. Friend accept that gobbledegook and incomprehensibility are rarely the hallmarks of good government? This makes the Schleswig-Holstein problem appear positively kindergarten. Will my right hon. Friend tell the House that the needs and prudence of South Staffordshire have been recognised in the assessment?

Mr. Baker: I have said before that the whole system of rate support grant is Byzantine in its complexity.

Dr. Cunningham: I said it.

Mr. Baker: We have both said it. Although the House cherishes this statement once a year, it might be better to issue the figures so that hon. Members and the authorities can absorb and analyse them.
South Staffordshire's grant this year is £686,000. If the system had not been changed, it would have dropped by about £200,000 to £437,000. South Staffordshire is eligible for a grant ranging from £600,000 to £650,000, which could be more if the economies recommended by the Audit Commission were made.

Mr. Robert Kilroy-Silk: However complex or Byzantine, one fact stands out. During the years, the Government have massively reduced the proportion of authority expenditure that is provided by central Government. That reduction has been directed disproportionately at the poorest local authorities representing the most deprived areas. Do not those proposals, coupled with those announced yesterday by the Secretary of State for Social Services, represent a massive, sustained and vicious attack on the poorest people for the benefit of the rich and privileged?

Mr. Baker: The hon. Gentleman is indulging in pre-selection rhetoric. The increase in grant in his constituency will be significant, after allowing for the transfer of responsibilities from Merseyside county council. In current expenditure in 1979 and current expenditure this year in all the metropolitan areas, the towns and cities and the partnership areas, there has been an increase in real terms of 7·5 per cent.

Mr. Anthony Beaumont-Dark: I shall ask no question about Byzantium or Schleswig-Holstein, but I wish to know about somewhere nearer home. It is like walking through a sea of treacle to get to the figures on Birmingham. Am I right in assuming that Birmingham will get a little more, at least for the grave problems that it faces, or have the targets been drawn so hard that the noose will be so tight on an authority which, although regrettably Labour-controlled, has been pretty responsible— [HoN. MEMBERS: "Oh!"] Not very, but pretty. Will we get more money to deal with those problems, or shall we unleash militancy upon all cities because justice is not done to those with the greatest problems? Can my hon. Friend tell us how much we shall get? But please do not tell me yet.

Mr. Baker: I shall try to thread my way through the maze of figures for Birmingham. This year, its grant is £165 million. Had we not changed the system, it would have received £158 million. If it were to spend at cash


standstill—that is probably ambitious in terms of a city—it would receive £201 million. Should it spend at 3·5 per cent. above the rate of inflation, it would receive £185 million, and should it spend at 4·5 per cent. above the rate of inflation, it would receive £180 million. Birmingham spends about 6 per cent. below GREA, and we have increased its GREA by 7·5 per cent. If it wishes to spend right up to its GREA, there will be substantial rate increases in Birmingham. But that would mean an increase of about 14 per cent. in expenditure, and I do not believe that the sort of council to which my hon. Friend referred would take such an irresponsible decision.

Mr. Max Madden: The Secretary of State seems to have achieved the biggest miracle since the loaves and the fishes, inasmuch as he has reduced the total money available, but every place mentioned so far has received more.
Does the right hon. Gentleman remember a brief visit to Bradford at the end of November? Does he recollect being told that there is a belief in the city that, since we took legal action against his Department, it has undertaken a vendetta against Bradford? How can he reconcile the amount of grant paid to Bradford—a city whose population will increase by 10 per cent. during the next 20 years, and which faces a massive unemployment crisis and serious problems in the housing and education services?

Mr. Baker: I remember my visit to Bradford, and I refute completely the allegation that my Department is undertaking a vendetta. That is extravagant and absurd language, as the hon. Gentleman well knows. This year, Bradford will receive £107 million. Next year, it is likely to receive a grant of about £125 million. I admit that a large proportion of the increase is due to abolition. The hon. Gentleman will know that the urban programme for Bradford is worth between £4 million and £5 million. I have shown my readiness to approve further sums for Bradford if it introduces schemes for redeveloping the city centre.

Mr. Robin Squire: Will my right hon. Friend confirm that the increase in grant for Havering—a law-abiding authority—is almost the lowest in London, despite the fact that it will also have to take on many new responsibilities after the GLC is abolished? Will my right hon. Friend comment on the operation of the concessionary fares calculation, under which the cost of a statutory scheme in London from next April, which will be about £2·7 million to Havering, is met by a GREA of no more than £1 million?

Mr. Baker: I shall have to check the calculation for a specific borough, but I can confirm that the grant to Havering will be higher next year. I accept at once that that is a reflection of the services that it will have to take over form the GLC. But after discussing the matter with authorities in London, I am convinced that they will make substantial savings, because the grants that I have announced for London assume a continuation of expenditure at broadly the level of this year. If savings can be made, the position of the successor authorities will be much better.

Several Hon. Members: rose—

Mr. Speaker: Order. A statement on Wales will follow this one. I shall allow questions on this statement to continue for 15 minutes, and, if questions are brief, I hope that everyone can be called during that time.

Mr. Martin Flannery: Will the Minister admit that his bland and smiling effrontery in the face of misery and poverty is nauseating? The industrial city of Sheffield has more old people than any city in Britain and is doing its utmost to supply services to ordinary folk. How can the Minister and Conservative Members—the Conservative Benches are full of consultancies, wealth and directorships—have the nerve to say that the Government will cut our services while pouring wealth into their pockets? How does he expect us to explain to our people, in the face of that, that this place is hardly worth inhabiting?

Mr. Baker: The hon. Gentleman has come to the House on the wrong day for the wrong debate. He should have been here for the debate yesterday—

Mr. Flannery: I was here yesterday. [Interruption.]

Mr. Baker: My right hon. Friend the Leader of the House says, "We did not want him there."
There will be an increase in grant to Sheffield. I accept that it will have to take over some of the responsibilities of South Yorkshire county council. The latter was rate-capped last year. If the hon. Gentleman wishes me to extend rate capping to Sheffield, perhaps he will let me know.

Mr. Terry Dicks: Unlike members of the press, I was not privy to this information in advance, so I had to make some quick calculations. Will my right hon. Friend explain why Hillingdon—a good Conservative authority—will lose about £9 million in grant, which will mean an 8 per cent. increase in rates if it is to stand still? That does not take into account costs after the abolition of the GLC. Is that not disgusting, and is it not a great shame for the ratepayers of Hillingclon? Should not the Secretary of State and his civil servants be ashamed of themselves for treating us in this way?

Mr. Baker: I recognise the anxiety of my hon. Friend and the other two Members who represent Hillingdon about this matter, but I regret to say that Hillingdon is likely to get less grant next year. That reflects its relatively high expenditure—

Mr. Dicks: Because of Labour councils before us.

Mr. Baker: That is absolutely right. However, a further reduction in spending—I can put this to my hon. Friend, who is a member of that council—will increase its grant significantly on top of its lump sum receipt of more than £4 million from the London rate equalisation scheme.

Mr. David Penhaligon: Which authorities will receive a smaller percentage of the global sum available as a result of those changes?

Mr. Baker: That is a broad question. I hope that the hon. Gentleman will study the figures. This year, Cornwall will receive £77 million. Under the present system, that sum would have fallen next year to £74·9 million. Instead, it could be eligible for £79 million, £78 million or just below £78 million.

Mr. J. F. Pawsey: Does my right hon. Friend accept that the abolition of targets will


be warmly welcomed by all those involved in local government? What effect will the settlement have on low-spending shire counties such as Warwickshire and on low-spending, careful authorities such as Rugby?

Mr. Baker: I reiterate that the premiums in the new system means that the rewards will go to those councils that can make savings and are low spenders. That is the effect of the abolition of targets, penalties and holdback. There will be a considerable premium for all those authorities that can make savings, because their grant will go up in relation to the savings that they can make.

Mr. Norman Atkinson: On the more general message that the Minister gave earlier to local authorities, will he explain why it is bad for the economy for a person to receive a dustbin through the rates, but a good thing for the economy if he buys a dustbin over the counter of a shop?

Mr. Baker: I can only say, in respect of the question to the extent that I understand it, that those authorities that have privatised refuse collection have always made savings, and the Audit Commission has identified in refuge collection savings of at least £30 million to £50 million a year. Those are the sort of savings available if proper management and controls are introduced into local government expenditure.

Mr. Michael Shersby: How will the system of caps and safety nets produce the phasing to which my right hon. Friend referred in answer to a parliamentary question from me on 4 December? What is the precise percentage by which Hillingdon's block grant entitlement will fall this year?

Mr. Baker: I shall write to my hon. Friend with the answer to his second question.
On the first question about caps and safety nets, needless to say anything in rate support grant is complicated, but this is one of the more complicated aspects. My hon. Friend has written td me about a different system of capping and nets. The caps and nets that we have introduced will phase out over the years, and that is important because I am anxious to ensure that the gains to the low spenders should come through as quickly as possible.

Mr. John Fraser: Am I right in thinking that Lambeth will lose £7 million-worth of grant if it maintains services next year at the same level as this year? What justification can there be for that differential of £7 million, which is almost as great as the net contribution that the Government make to the inner city partnership funding for that borough?

Mr. Baker: I ask the hon. Gentleman to look at the figures on Lambeth. Matters are always complicated regarding a successor council authority in an abolition area. There is a significant increase in grant for Lambeth, and I have no doubt that there are significant savings to be made in Lambeth. The classic comparison is always between Lambeth and Wandsworth. The savings are there to be made in Lambeth and I believe that, in his heart of hearts, the hon. Gentleman knows it.

Mr. Anthony Nelson: Does my right hon. Friend appreciate that there wil be a widespread feeling of

betrayal in the shire counties at today's announcement? Is he aware that many of the figures that he has given consistently show in real terms a reduction in the support for the next financial year? Will he confirm that the shire counties, as a proportion of expenditure, will now receive less than at any time since the new system was introduced? What is the basic, fundamental political judgment that my right hon. Friend has made that has shifted him away from the policy of his predecessors who were gradually shifting resources to the shire counties and away from the inner cities?

Mr. Baker: The fundamental judgment that I have made is that it is right and appropriate to recognise the higher costs arising in our towns and cities for the administration and provision of social services and concessionary fares.
My hon. Friend knows well, because like me he represents a rich and prosperous area—

Mr. Nelson: It is not. Pensioners make up 23 per cent. of the population.

Mr. Baker: The county has a grant of £52 million and will suffer a significant drop down to £41 million under the old system and can then qualify for grants of between £53 million and £46 million. As regards the town of Chichester, my hon. Friend will find from the figures that it has a grant this year of £1·6 million. It would have dropped £200,000 uder the old system and it will qualify for a grant of broadly what it gets this year.

Mr. Peter Pike: When will the Secretary of State understand that the so-called overspending authorities such as Burnley are virtually unable to provide adequate service levels to the people in their town? When will he also understand that, if he wants a system based solely on the factor of GREAs, unless he can prove that that system is fair, the foundation on which it is based is false? If he is confident that he is right, why should the Under-Secretary in his Department, who agreed to meet a delegation from the majority group and the Conservative group and officers from Burnley borough council who were appointed to discuss this subject in January, arrange a meeting with the leader of the Conservative group for the week before?

Mr. Baker: That was prudent of my hon. Friend the Under-Secretary. Savings can be made in levels of expenditure in towns such as Burnley. We are not asking for draconian savings. When the rate support grant statement was made last year, my predecessor was told that huge staff cuts would be made and tremendous cuts in services. This has not proved to be true. We are asking authorities, particularly the high-spending ones in the northern towns and cities, to run their affairs more efficiently and economically and still provide a service to the public.

Mr. Conal Gregory: I am sure that many people in Yorkshire, and the city of York in particular, will welcome my right hon. Friend's statement. Would he like in particular to commend those in the Conservative group on York city council who have held back the excessive spending that the Labour leadership wanted? As it is, I imagine that he will confirm that York will do better out of the statement, substantially because the Conservative group held back against the Labour councillors.

Mr. Baker: I confirm what my hon. Friend has said and will also say that that success has been achieved as a result of the efforts by the Conservatives in the city of York. I applaud them for what they have done.

Mr. Eric Cockeram: Has my right hon. Friend noted the widespread concern in the shire counties at the state of rural roads—the cost of which falls disproportionately heavily on a scattered population? The shire counties have not received sufficient support in recent years for adequate maintenance of roads following severe winters. Will my right hon. Friend assure the House that the component part of the announcement today calculated for this specific purpose, allows that maintenance to be made good?

Mr. Baker: Yes, one of the elements in GREA is the maintenance of roads, including their maintenance in severe weather. It also takes into account those parts of the country that are geographically widespread. However, if hon. Members wish to influence the consideration of GREAS, this is done in the spring and summer, when they are being examined by the local authority associations and the council. That is the time to lobby for a particular preference for a particular element of GREA taking greater priority over another. That has been done. I note what my hon. Friend said about the maintenance of roads, and I shall bear it in mind.

Mr. Derek spencer: Does my right hon Friend agree that this setting gives Leicester city council the opportunity to learn a permanent lesson from the rate capping of last year, and that, provided that they do not act like town hall Bourbons, this settlement will be in the interests of the people of Leicester?

Mr. Baker: I can confirm that. The towns and cities benefit from this grant settlement, and this could not have been arrived at without taking the action that we took in respect of Leicester last year. I thank both my hon. Friends who represent Leicester for the warm support that they have given me and my Government during that process.

Mr. John Powley: My right hon. Friend and his predecessors will be aware that, in past years, Norfolk county council has worked its budgets in an economical fashion. It has practised economies and management technique which have kept the rate down to a prudent level. Will my right hon. Friend give me an assurance that past performances in rate support grant, which have not recognised those economies, will be put right this year, after all the sufferings that we have borne because of the rate support grant system deficiencies in previous years?

Mr. Baker: The leader of Norfolk county council has consistently lobbied us about the position of Norfolk county council. I recognise that it is an economical council. If we had maintained the present system of targets and penalties for next year, Norfolk county council would have lost a substantial amount of grant. However, the persuasive arguments of the leader of Norfolk county council—one among many, but a significant voice—led me to believe that we had to abolish targets, penalties and holdback. I have had to stage the gains that will flow to a county such as Norfolk over two or three years; otherwise the losses that would be sustained by many authorities would be too great. However, the gains will

come through. I would say to the shire counties, and to Norfolk in particular, that the rewards are there to be taken if they can run economical services.

Mr. Timothy Wood: My right hon. Friend need not, I am afraid, tell me what is Stevenage's grant. It is nothing this year and it is nothing next year. However, Hertfordshire's grant has been reduced by £20 million—by over one third—for the coming year. Hertfordshire can surely not be called an extravagant county. Can my right hon. Friend justify this reduction?

Mr. Baker: It is true that Hertfordshire has not benefited from the GREA changes. However, as with all low spenders, it stands to gain from the abolition of targets and penalties and the consequential alteration to the grant arrangements. We have had to cap the gains that low spenders will get next year from our changes. However, the cap on gains will disappear over a period of years. That will allow low spenders to get the full benefit of the changes that we are making.

Mr. Bowen Wells: Will my right hon. Friend confirm that this decrease in the grant will result in a rate increase in Hertfordshire of between 20 per cent. and 25 per cent.? During the last seven years, Hertfordshire has done exactly what my right hon. Friend advised us to do: to see Ministers about the calculation of GREA in May and June. We were given assurances by his hon. Friend the Minister for Environment, Countryside and Local Government that he would make certain that the GREA contained a weighting to protect Hertfordshire My right hon. Friend has gone back on that arrangement. May I ask him to look again at the GREA calculation? It discriminates seriously against Hertfordshire, which cannot make reductions without very seriously damaging education.

Mr. Baker: I appreciate my hon. Friend's concern about the calculation of GREAs, but he is mistaken if he believes that I alone decide these matters. It is a most elaborate process of discussion, negotiation and calculation in which the officials of the county councils and district councils are involved.

Mr. Wells: But my right hon. Friend ignores them.

Mr. Baker: With great respect to my hon. Friend, we do not ignore their representations.

Mr. Wells: Hertfordshire's representations have been ignored.

Mr. Baker: The point about Hertfordshire is the point that I made a few moments ago: that, if the caps and gains affect Hertfordshire, the effect will be reduced in the course of the next two or three years. The rewards will be there for low spenders.

Mr. Tim Smith: Will my right hon. Friend confirm that the home counties are being asked to pay for the abolition of the Greater London council, as follows: Bedfordshire, £10 million; Berkshire, £8 million; Buckinghamshire, £4 million; Essex, £16 million: Hertfordshire, £20 million; Kent, £10 million; and Surrey £14 million? What is the justification for this, and why were we not told before?

Mr. Baker: I reject completely the implication behind my hon. Friend's question. I have already said that. I have deliberately not used the London lever—the diversion of


grant specifically to London. We examined the basis of the GREA calculation. I should not have thought that my hon. Friend would object to the recognition of the higher social and personal needs of our towns and cities, or to concessionary fares. That is why there has been an increase in the grants to the towns and cities.

Mr. Michael Knowles: I can help my right hon. Friend on this occasion. I shall say something nice to him, which is more than my hon. Friends have done. Can he confirm that in Nottingham's case the combination of the switch of resources to the inner cities and concessionary fares means that Nottingham city council will be eligible for more grant in the coming year, provided that it holds its spending?

Mr. Baker: Yes, I can confirm that precisely. Nottingham city council will be eligible for more grant. The size of the extra grant that it receives will depend entirely upon the economies and the savings that it can make. If it can make more savings, the grant will be greater.

Mr. Piers Merchant: Will my right hon. Friend ensure that the greatest vigilance is exercised in determining the level of limitation upon rate precepts in the metropolitan counties so that cities such as Newcastle upon Tyne, with an already very high rate, do not show an increase, bearing in mind that, under today's rate limitation announcement, which is welcome, a suspiciously large rate figure is still allowed for?

Mr. Baker: Newcastle upon Tyne is one of the authorities that is subject to rate capping. If we had not rate-capped Newcastle upon Tyne, the rate increase would have been about 29 per cent. The result of rate capping is that the rate increase in Newcastle upon Tyne will be about 7 per cent.

Mr. Peter Bruinvels: I recognise my right hon. Friend's commitment to the inner cities. I recognise also that Leicester will receive at least an extra £2 million in grant. But what financial checks will be made available to ensure that Leicester, as a transport undertaking, continues to provide concessionary bus fares instead of spending excessive further sums on political propaganda?

Mr. Baker: Leicester has spent a very large amount of money upon political propaganda, and, as my hon. Friend pointed out, that money has largely been wasted. This is essentially a matter for the Leicester city council. If it continues to waste money in that way, the result will be that it loses grant.

Mr. Jack Straw: Since rate increases this year have risen, on average, by just under 10 per cent.—that is, by 9·5 per cent.—and since the Secretary of State says that the average rate increases next year should be no higher than the rate increases this year, will he confirm that this statement means that he is predicting rate increases of about 10 per cent.?

Mr. Baker: During the exchanges this afternoon, several hon. Members have estimated the rate increases. I would counsel everybody to be very careful about giving credence to estimates that are made today. The level of rate increases depends not just upon the statement that I have made today but upon the reserves and the balances.
Given the grants that I have announced today, and the possible projected expenditure patterns, I have said that the rate increases next year are likely to be of the nature of the rate increases in the current year. I think hon. Members will find that they are rather lower than that. The increase will probably be 7·5 to 8 per cent. However, my point is that the level of rate increases depends essentially upon the budgets that local councils draw up during the next two or three months and upon their ability to make savings.

Rate Support Grant (Wales)

The Secretary of State for Wales (Mr. Nicholas Edwards): Mr. Speaker, with permission, I wish to make a statement about the Welsh rate support grant settlement for 1986–87.
I am today announcing to the Welsh Consultative Council on Local Government Finance the details of the 1986–87 rate support grant settlement. Copies of the text of my statement to the consultative council, together with a number of key statistical tables, have been placed in the Vote Office and in the Library of the House. The rate support grant report has been laid before the House today and will be debated in the usual way. A copy of the report has also been placed in the Library.
This settlement marks an important stage in the process of bringing Welsh local authority expenditure into line with the Government's plans. My strategy for 1986–87 reflects the commendable performance of Welsh local authorities in reducing the overspend against the Government's targets from around £50 million in 1981–82 to £4·5 million in 1985–86. The total increase in rates since 1979 has been kept to seven percentage points below the change in the retail prices index. This success in reining back current expenditure has enabled me to release additional resources for much needed capital investment.
Against that background, the 1986–87 settlement presents a challenge to local authorities in Wales. I acknowledge that in meeting it they will face difficult decisions. They will need to press for moderate pay settlements for their employees and find a way of absorbing any additional costs if they are to avoid taking the easy option of adding to the burden on ratepayers. Pay awards should not lead automatically to higher spending in either the public or private sectors, nor should they be passed straight on to customers. The aim should be to seek to absorb any additional costs through the better use of resources and by achieving better value for money. Good examples have already been set by many authorities in Wales in this respect.
I turn now to the details of the settlement. The main features confirm the intentions that I announced in July, subject only to modifications to reflect the reduced level of interest rates and revised estimates for specific and supplementary grants. The total of relevant expenditure provision accepted for grants is £1,597·1 million. This marginal reduction of £900,000 on the provisional figure announced in July allows for a reduction reflecting the fall in interest rates which has broadly been balanced by an increase in provision for financing additional capital expenditure. The total comprises £1,368·1 million for current expenditure and £229 million for non-current items.
Current expenditure provision—after taking into account the higher level of direct funding in the further education sector by the Manpower Services Commission—is £51 million, or 3·8 per cent. more than the expenditure underlying local authorities' budgets in 1985–86, while the total of relevant expenditure is about £75 million, or 4·9 per cent. more than the comparable budgeted total for the present year.
Aggregate Exchequer grant, as announced in July, will be £1,067 million, comprising £169–4 million for specific grants, £19·6 million for transport supplementary grant,

£2·2 million for national parks supplementary grant and £875·8 million for the rate support grants. Domestic rate relief remains unchanged at 18½p in the pound, which costs £25·8 million, leaving £850 million as block grant. After deducting £600,000 for payments to specified bodies, the amount available for distribution to local authorities is £849·4 million.
The aggregate Exchequer grant of £1,067 million is £52·8 million or 5·2 per cent. more than the aggregate Exchequer grant provision in the main report for the current year, and represents 66–8 per cent. of relevant expenditure, as against an effective rate in the current financial year of 66·6 per cent. Broadly speaking, therefore, the level of grant support has been maintained.
The settlement marks the end of individual local authority expenditure targets, which have been abolished for 1986–87. They will be replaced by a tougher block grant system which provides a fairer method of containing expenditure. The precise mechanisms have been developed in close consultation with the local authority associations and in particular take account of proposals put forward by the Welsh Counties Committee. The associations accept this as a reasonable price to pay for moving away from selective controls and for restoring a greater measure of local accountability.
Under these arrangements, for any given increase in expenditure there will be a reduction in grant. This means that a significantly higher proportion of costs will be borne by the ratepayer as spending is increased. Conversely, the new system also offers positive financial rewards to ratepayers in authorities where spending is held down. There will be significant rating benefits for authorities which budget to reduce spending or which increase spending by less than the anticipated rise in inflation.
If local authorities spend in line with this settlement, the amount of grant claimed will equal the amount of grant available. If aggregate spending exceeds the level of expenditure provision, and there is an underclaim of grant, the margin of resources will remain available for local government spending in Wales. I shall await local authorities' 1986–87 budget returns before deciding how any such surplus grant might be distributed. In setting their budgets councils should not assume that they will benefit from the redistribution of any resources released by overspending.
This settlement is a good one for Wales. The increases in relevant expenditure and in aggregate Exchequer grant are higher than the forecast rate for inflation and provide a realistic basis for next year's budgets. Rate increases, on average, need be no more than 3 or 4 per cent. Spending at the settlement level would be the same in real terms as spending in 1979–80. Local authorities can plan ahead secure in the knowledge that this provides the degree of stability in expenditure that they have been seeking.
Both domestic and business ratepayers have the right to expect their local authorities to manage services, on their behalf, in an efficient and cost-effective way. This settlement recognises that right and provides a solid framework for progress. I sincerely hope that local authorities will meet the challenge and the opportunities that it offers for the benefit of the communities which they seek to serve. I ask hon. Members on all sides to support them in that task.
I commend my proposals for the Welsh rate support grant settlement to the House.

Mr. Barry Jones: The Secretary of State, not unnaturally, put a self-congratulatory gloss on his complex statement. Has he forgotten that the overall cut in grant in real terms between 1978–79 and 1985–86 has been 13·4 per cent.? That is a statistical way of saying that local councils have taken a severe financial beating from the Welsh Office.
At the same time, have not the Government permitted a blizzard of unemployment in Wales and permitted the consequential and unprecedented demands upon council services which were grossly underfunded? Is there not now another cut, albeit small?
Have not the Welsh district authorities warned the Secretary of State that the average Welsh domestic rate bill might increase by 8 per cent. or more, and that Welsh county rates increases will be significantly above the inflation rate—so I am informed? The right hon. Gentleman has failed to protect the budget. The local authorities say that we are short of about £27 million to stay level with this year.
Are not district councils in Wales astonished that the right hon. Gentleman has presented a settlement based on grant mechanisms which are so complex that even council treasurers are perplexed? Depending upon the order in which the figures are fed into the Welsh Office computer, does the Secretary of State agree that there will be a change in the grant-related poundages of 1p for 15 councils? Will that system not create problems for certain counties, not least for West Glamorgan? Will the right hon. Gentleman concede that he has espoused an unsatisfactory system? Will he promise next year to adopt a simpler and more equitable approach? Will he call a joint conference to tackle the issues by 1987–88?
The right hon. Gentleman purred with satisfaction at the increase in capital investment. I acknowledge sincerely the increases to which he pointed. They are a most welcome development, but they merely edge towards the levels of previous years. Has the right hon. Gentleman forgotten that, notwithstanding his boast of a £31 million housing increase, the allocation is £60 million down on the allocation for 1983–84—general election year.
Are not local authorities deeply apprehensive about the settlement and their ability to meet pay and price increases? The right hon. Gentleman has presented the settlement in the most favourable light, but has he not masked the fact that authorities might make cuts of 3 to 4 per cent., since the increase in current expenditure is insufficient to keep pace with the movement in costs? Has the right hon. Gentleman forgotten local authorities' difficulties in meeting the pay claims of their white collar staff, the police, the firemen and the teachers, with their end-loading complications and settlements above 5 per cent.? Here is the flaw in the settlement. What extra cash does the right hon. Gentleman have to fund the teachers' increase? Does he have the extra money in the way in which the Secretary of State for the Environment said that he had the money? The House would like a comment from the right hon. Gentleman on the question of teachers' pay.
Will not joint financing schemes with health authorities now come under extremely severe pressure? This settlement will not help authorities to meet the needs of the elderly in the community, remembering that the legitimate demands of the elderly and disabled are increasing hugely year by year. In other words, are the compassionate plans at risk at county level?
Is it not a fact that the sums advanced are insufficient? We find this a depressing statement. Where does it make amends for the savage cuts that have occurred in previous years? Money is not being given back. There is still a trend, for all its dressing up by the right hon. Gentleman, of cuts, and it is backed by a harsh regime. The right hon. Gentleman is not acknowledging sufficiently the crisis of unemployment and bad housing in the south eastern valleys of Wales and in the steel townships. All councils in Wales will be deeply disappointed by his statement.

Mr. Edwards: The hon. Gentleman referred to an overall cut in real grant since the Conservatives came to office. I repeat what my right hon. Friend the Secretary of State for the Environment said in connection with the English statement, that it was a deliberate decision to transfer some of the responsibility for financing local government from the central taxpayer to the ratepayer. I remind the hon. Gentleman that in Wales this year there has been no further switch in that direction. We have maintained the percentage grant. Indeed, we have marginally increased it this year.
The hon. Gentleman talked about a severe financial beating, but in fact both provision and aggregate grant are being increased by more than the expected rate of inflation. He made the usual gloomy and pessimistic rating forecasts. In the period for which I have been responsible, the Welsh Office has had a good record in forecasting the likely rate pattern. There is no reason why, if expenditure is in line with provision and the use of balances is at about the same level as last year, average rate increases in Wales should be more than the going rate of inflation. Indeed, there are a number of counties in which we expect to see rate reducions. Dyfed is one such county.
The hon. Gentleman talked about the complexities of the grant mechanism, and we can agree that the systems are complex. The mechanisms that we are using this year, particularly the system that is replacing the target mechanism that we previously employed, has been designed in close consultation with the local authorities in Wales, and they believe that this is a considerable improvement.
The hon. Gentleman talked about increases in capital expenditure. I am glad that he acknowledges the substantial additional capital provision that we have made, and have made for a number of years, thanks to the way in which Welsh local authorities have been able to hold down current expenditure.
I told the House in the summer that we were now within 1 per cent. of the target that we originally set, which was designed simply to stop the headlong annual increase in spending and to get expenditure back to the level of 1978–79, when the Conservatives came to office, and this settlement should enable Welsh local authorities to do that.
I was asked about pay and price provision. The House must understand that if there are large pay settlements, someone must pay, either through the rates or through a loss of services. From the education point of view I confirm what my right hon. Friend said, in that we have not included in this provision the money that the Government have said will be on the table if there is a settlement that takes proper account of the conditions of services and the other requirements that the Government have made clear are necessary for a settlement of the education dispute. We have made provision for a 7·5 per cent. increase in police pay.
The hon. Gentleman said that cuts of 3 or 4 per cent. might be required. I was not clear what he meant, because cuts in the level of expenditure by local authorities will lead to increases in grant, and I emphasise that if authorities overspend on the basis of this provision they will get less grant. Authorities which reduce their expenditure will get additional grant, and their ratepayers will benefit directly.
I remind the hon. Gentleman that West Glamorgan does well out of the settlement. We expect that if it settles expenditure in line with the assumptions that I have set out, there should be increases in West Glamorgan on the rates bill of about 2·5 per cent. That is below the general level of inflation.
I was asked by the hon. Gentleman about specific services. The way in which local authorities decide to spend their money is for them. They must decide their priorities, but they should remember that they also have a responsibility to the ratepayers who fund them.

Sir Anthony Meyer: Is not the helpless floundering of the hon. Member for Alyn and Deeside (Mr. Jones) the clearest possible acknowledgement of the success of my right hon. Friend in achieving a settlement that is regarded as satisfactory more or less throughout Wales?
Will my right hon. Friend comment on the fact that possibly the greatest threat to ratepayers in Wales conies not so much from Labour councillors, who know that they carry some responsibility in these matters, as from the existence in many counties, and particularly in the county of Clwyd, of a large block of so-called independents, who hold the casting vote and who refuse to make the necessary economies that would enable efficient administration to be carried out at reasonable cost?

Mr. Edwards: I entirely agree with my hon. Friend. If the council in Clwyd can limit the year-to-year growth in its spending to 5 per cent., I expect that it will have a similar increase in rates. Indeed, in Colwyn and other districts—for example, in Glyndŵr—I expect that the rates could be held at their present level, or even reduced.

Mr. D. E. Thomas: How does the Secretary of State equate his statement to the consultative body that local authorities should be expected to maintain services at their present levels with the massive cuts in the nursery school programme approved this morning by Clwyd county council? Will the right hon. Gentleman look again at his statement about the work of the Audit Commission? Is he satisfied that the commission has taken sufficient account of the particular problems of local authorities in Wales in its overall studies of England and Wales?
As for grant-related expenditure, the right hon. Gentleman's Department admits that this is a rough and ready calculation of the relative needs of various authorities. Is it not time that there was a more clearly agreed indicator related to the social needs of areas? Is the right hon. Gentleman aware that the rent increase of 65p a week will itself be an added burden on many low income families in Wales? Is he also aware that the transport supplementary grant capital spending is totally inadequate to meet the kind of road programme that local authorities in Wales really need?
In relation to the national park supplementary grant, I fully endorse the right hon. Gentleman's statement

criticising those county councils and local authorities which are not funding their part of that programme. Will he ensure in future that it is withheld from their overall block grant if they are not prepared to spend that money on their national park functions?

Mr. Edwards: The national parks supplementary grant has been increased by not more than 9 per cent. and that takes account of the requirements being placed on the national parks authority.
The hon. Gentleman referred to the transport supplementary grant, where the system has been changed and the scale of the projects for which grant is provided has been altered. I believe that grant is in line with the assessed needs for grant on the basis of our negotiations with the local authorities.
The hon. Gentleman says that we are dealing with a rough and ready system. Yes, but it is a system that we discuss at great length with the local authority associations and we seek to build into it all the points that they make. We made various alterations this year. It is a basis not for making absolute judgments about the level of services required in a particular area, but for obtaining a fair distribution between the Welsh local authorities. It follows from that that if one authority gets more, it will inevitably have to come from one of the other authorities.
The Audit Commission has spelt out particularly clearly the enormous scope for savings that exist to the benefit of ratepayers from local government in Wales, as in England. The hon. Gentleman referred to expenditure in Clwyd and I have already pointed out that Clwyd has been set a reasonable objective. If he did not refer to Gwynedd, as might have been expected, it is because if Gwynedd county council can limit its spending growth I anticipate that there should be a rate reduction of over 3 per cent. for the ratepayers there.

Several Hon. Members: rose—

Mr. Speaker: Order. This is a Back-Benchers' day so I shall endeavour to call all those who are rising hut I ask them to be brief in their questions, please.

Mr. Ian Grist: I warmly congratulate my right hon. Friend on his statement this afternoon. What will its effect be on south Glamorgan, Cardiff and the Vale of Glamorgan? Can he name any authority in Wales which has privatised any of its services and with what result?

Mr. Edwards: Yes, some local authorities have privatised and have begun to show savings. There are significant savings to be made. I know that the Welsh local authorities have been listening seriously to the suggestions put to them by the Audit Commission and I hope that that will lead to further substantial savings.
The south Glamorgan authority made heavy use of reserves in the present year and as a result it is likely to increase its precept above the general rate of inflation. If it spends at a 5 per cent. increase this year we could see an increase in rates of more than 6 per cent. On the other hand, the Cardiff city authority could have a small increase in rates if it holds expenditure levels to that kind of figure. There is a similar possibility of a substantial reduction in the Vale of Glamorgan.

Mr. Donald Coleman: As has already been said of the English rate support grant settlement, the


Secretary of State for Wales' announcement is complex—the most complex yet. There is no doubt that treasurers in Wales will be perplexed.
Is the Secretary of State aware that, for west Glamorgan, there are signs that, despite this announcement today, there will still be considerable increases in rates next year? Will he undertake not to be disposed to penalise the county for taking action that arises directly from the rate support grant settlement?
What provision has been made to help the district councils deal with the considerable problems of local authority housing in Wales?

Mr. Edwards: I have already announced substantial increases in capital allocations, which will make a considerable contribution to the problem of local authority housing in Wales.
I must make it clear that, because of the relative success of Welsh local authorities in holding down their current expenditure and their rate increases in recent years, this is a much easier settlement for Welsh local authorities to achieve than will generally be the position in England. They have been meeting the objectives that we set over a period and they now find themselves in a position where there is a substantial increase above the anticipated level of inflation in aggregate Exchequer grant and in current and relevant expenditure and that position compares favourably with England.
The hon. Gentleman's pessimism about west Glamorgan is misplaced. It may go back to some of the figures that we looked at when we were considering the original proposals for the settlement in the summer. As a result of representations made by the Welsh counties and certain changes in the technical system since then, the position of west Glamorgan has substantially improved and I do not anticipate the necessity for more than low rate increases for districts in west Glamorgan.

Mr. Stefan Terlezki: I commend and congratulate my right hon. Friend on presenting us with a good package. It is good housekeeping on behalf of the Principality. Will there be any cuts in services in Cardiff, whether in transport, health or housing, or is he satisfied that we shall continue to go from strength to strength under this package?

Mr. Edwards: There is no doubt that Cardiff is in a position to provide a satisfactory level of services without increasing rates. There is no doubt that it should be able to hold its rate increases to a relatively low level and increase expenditure in line with the increase in costs. However, as I have explained, the impact on the ratepayers of south Glamorgan's decision to use a lot of money from its balances last year will be felt in the rate bills of ratepayers in the area.

Mr. Donald Anderson: Does the Secretary of State at least recognise that if there is less criticism this year from Labour Members and local authorities it is because the annual reduction, year on year, in the proportion of local government expenditure covered by the Government at last appears to have stabilised, although the cumulative damage over the years since 1978–79 remains?
Does the Secretary of State assume that the sale of council houses has now peaked? Why are Welsh local authorities allowed to retain a smaller proportion of those receipts than their English counterparts?

Mr. Edwards: They are also allowed to retain a larger proportion of receipts of sales of other capital assets. We have taken a decision on the overall balance, taking the allocations into account as well, which we believe is to the greatest possible advantage of Welsh local authorities.
The accumulated damage is that rate increases in Wales have been 7 per cent. below the increase in inflation and we have been able to get expenditure back to the level of 1978–79 at which we can offer stability to the local authorities in Wales. I have told them that if they could meet the Government's targets and objectives they not only had the prospect of being able to give a satisfactory settlement to their ratepayers but they had the prospect of stability, in the knowledge that they would continue to receive the same overall level of provision. We have honoured that undertaking. We have now got to the point where they can look to the future and plan for it with a great deal of confidence.

Mr. Keith Best: Is not the Opposition's allegation of complexity designed to camouflage the fact that this is a good settlement and they do not know how to attack it? Is not the message to Welsh authorities that, if they can contain current expenditure, greater autonomy and greater capital expenditure will follow?

Mr. Edwards: Yes. If expenditure is held below our assumptions, there will be additional grant and an even greater opportunity to reduce the rate burden. That is certainly true in my hon. Friend's part of Wales, where there is a real opportunity to reduce rates. I hope that that opportunity will be taken and that there will be a real reduction in rates in Gwynedd.

Dr. Roger Thomas: How will today's statement alleviate the problems faced by the highways department in the right hon. Gentleman's and my county? Is he aware that Dyfed has one third of the total road mileage in Wales, but that roads are crumbling and bridges are collapsing?

Mr. Edwards: The GREA system takes full account of total road mileage. That is one of the factors on which the assessments are made and the grant distributed after discussion and negotiation with all the counties in Wales. The settlement for Dyfed is extremely favourable and should allow the maintenance of services and a significant reduction in rates.

Mr. Keith Raffan: I congratulate my right hon. Friend on obtaining yet again such a favourable settlement for Wales, which is clearly shown by the way in which it has thrown the Opposition. Does he agree that in moving from a system with targets to one without it is extremely important that local authorities do not exceed their targets if they want to secure a better launching position in a tougher grant regime? Does he agree that Clwyd county council especially should heed that point by concentrating on its statutory obligations?

Mr. Edwards: The effect of the new regime for ratepayers will be very severe if there is any excess spending, but the rewards will be substantial if spending is kept down. The system that we have introduced will give real choice to local authorities.

Mr. Richard Livsey: Why have Powys and Clwyd county councils been singled out for a block grant increase of only 1·8 per cent. when Powys is considering closing 13 schools and decimating the education system? How will the settlement ease that situation?

Mr. Edwards: When the hon. Gentleman last made accusations about decimating the education system, which was during an election campaign, he falsely invented the threatened closure of a school. The allegation is equally false today. Powys comes out relatively badly because it is a relatively high spender in relation to GREA, but its ratepayers have relatively low rate bills. The hon. Gentleman should consider the rate bills being paid and the level of expenditure in relation to GREA.

Mr. Gwilym Jones: I am sure that my right hon. Friend's abolition of individual targets and the provision for expenditure increases above the likely rate of inflation will be warmly welcomed, but my constituents are apprehensive about excessive rate increases by South Glamorgan county council. My right hon. Friend has twice mentioned reductions in balances by that council this year, which had been called for on many occasions by my right hon. Friend and others, but this was a county council election year. Now that an election is no longer in prospect, what action does my right hon. Friend contemplate to encourage the council not to go in for excessive spending which will result in excessive rate increases for my constituents?

Mr. Edwards: My hon. Friend has given the answer himself. There is no doubt that excessive spending will result in high rate increases. Electors in the area must understand that that will be the result of decisions taken by the local authority.
In an earlier answer, I referred to getting spending back to the year in which we took office. I should have referred to 1979–80, not 1978–79.

Mr. Ted Rowlands: The Secretary of State talks approvingly about reining in current expenditure, but should he not make it clear that that means cutting nursery education, provision of school books and other educational materials? Does his statement not also assume that the teachers' dispute will drag on and on?

Mr. Edwards: No, it means none of those things. It means that local authorities have choices to make. It means that when there are substantial reductions in the number of pupils, as there have been, local education authorities must adjust provision. It also means that we have been able to provide substantial additional capital resources for local government in Wales as a result of holding current expenditure. The hon. Gentleman does no service to anyone by making suggestions of that kind.

Mr. Robert Harvey: I warmly congratulate my right hon. Friend on his statement. Will he confirm, however, that it does not allow for any increase in teachers' pay beyond the current guidelines put forward by the Government?

Mr. Edwards: The position was clearly spelt out earlier by my right hon. Friend the Secretary of State for the Environment. Any settlement which does not meet the Government's condition that it must be related to terms of service and assessment is not provided for in the arrangements that we have made. If an acceptable settlement were reached, however, there is scope for additional money to be placed on the table by the Government. That has always been our position. Those resources are not built into the settlement that I have put to the House today. My right hon. Friend spelt this out precisely and in some detail. I refer my hon. Friend to that statement.

Mr. Ron Davies: Does the Secretary of State agree that the best that can be said of the statement is that it does not impose any immediate further burden on Welsh authorities? Does he also agree, however, that when the current round of pay negotiations is completed and the teachers' dispute is ultimately settled there will undoubtedly be further pressure on Welsh education authorities and district councils which will inevitably mean more cuts and further reductions in services as the year unfolds?

Mr. Edwards: I do not think that it means more cuts at all. Far from being the best that can be said, it is clear from the questions asked today that the hon. Gentleman's initial comment is about the worst that could be said about the settlement. The Opposition have worked themselves up as much as they can, but they cannot make out that it is other than a good settlement.

Dr. John Marek: Does the right hon. Gentleman agree that, having used jackboot methods to control local authority expenditure in Wales for six years, in his statement today he anticipates wholly unrealistic percentage rises in wages and salaries?

Mr. Edwards: If the hon. Gentleman believes that local and central Government should automatically endorse and pay every claim and settlement that is made, he believes that we should return to a period of uncontrolled inflation which might indeed be the precursor of the jackboot, as it has been in the past. The most disastrous thing for a free society is uncontrolled inflation.

Mr. Allan Rogers: What will be the impact of the settlement on the 18,000 people in the Rhondda valley who are waiting for improvement grants?

Mr. Edwards: I made a separate announcement about increased capital allocation for Welsh authorities. The hon. Gentleman already knows what that settlement is.

Westland Helicopter Company

Mr. Denzil Davies: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
the future of the Westland helicopter company and the importance of that company to our national defence interests.
Since the statement by the Secretary of State for Trade and Industry on Monday, new facts have emerged and new developments have taken place. I submit that the matter is clearly specific as it relates directly to a company which for many years has supplied military helicopters to the Ministry of Defence and the armed services of the Crown. The matter is important as the success of Westland is crucial, not only to the company's thousands of employees and its shareholders but also for the defence of this country. Its future is now at a substantial risk.
The matter is also urgent, because decisions that could be irreversible and damaging to the national interests are now imminent. I submit that this matter should now take precedence over other business. We have had competing and conflicting statements from two Cabinet Ministers, we are about to go into recess, and it is vital that before doing so the collective voice of this House—even if the Government do not have a collective voice—on such an important matter should now be heard.

Mr. Speaker: The right hon. Member for Llanelli (Mr. Davies) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
the future of the Westland helicopter company and the importance of that company to our national defence interests.
I have listened with great care to what the right hon. Gentleman has said, and he knows that my sole duty in considering an application under Standing Order No. 10 is to decide whether it should be given priority over the business already set down for this evening or for tomorrow. I regret that I cannot find that the matter he has raised meets all the criteria laid down under the Standing Order; therefore, I cannot submit his application to the House.

Points of Order

Mr. Alan Williams: On a point of order, Mr. Speaker. I would welcome your advice on how we can protect the reputation of this House from what I feel is a serious distortion and misrepresentation of what happened yesterday. You were in the Chair during last night's important debate on Members' interests. I seek your advice on a press release—which may be in contempt of the House—that was issued by the leader of the Liberal party. It is entitled "Double standards anger Steel", but I should point out that the release seems to be devoid of any standards whatsoever. In it the right hon. Gentleman states:
MPs voted … against a call by Mr. Steel and SDP leader Dr. David Owen for the amounts
earned
to be declared
in the register.
Will you confirm, Mr. Speaker, that in making this important clarion call, neither the leader of the Liberal party not the leader of the SDP voted, spoke or even appeared in the Chamber? Will you also confirm—because this is important for the standing of this House—that the only member of the alliance who did speak had not even signed the amendment that he regarded as being of such importance? Will you further confirm that, when it came to a vote on sanctions to implement the register, a mere handful of alliance Members were among the 128 who voted in favour of it?
The right hon. Gentleman also says in the press release that we apply different standards and that "they"—the House but not he or his party—
did vote for a register for journalists
and
broadcasters".
Will you confirm that not one alliance voice was raised against that motion and that not one alliance vote was registered against that motion? Is not the right hon. Gentleman deliberately overlooking the fact that the House unanimously agreed to ask the Select Committee to investigate as a matter of urgency the declaration of amounts?
The press statement ends by accusing the rest of us of
damaging the standing of parliamentary democracy".
Would not you agree, Mr. Speaker, that the leader of the Liberal party has done a grave disservice to this House and that his distortion has damaged the standing of the House of Commons and parliamentary democracy? Out of respect for you, Mr. Speaker, I shall not call the leader of the Liberal party a pathetic hypocrite, but I am entitled to my thoughts.

Several Hon. Members: rose—

Mr. Speaker: Order. Let me deal with one thing at a time. It was my impression that last night's debate—I am sure that anyone who was present and heard it would agree—was in the best traditions of our parliamentary debates—

Several Hon. Members: rose—

Mr. Speaker: Order. I am on my feet. As to what was said and who voted or did not vote, that is all recorded in Hansard and in the Votes and Proceedings of the House. It is not a matter for me.

Mr. Tony Marlow: Further to that point of order, Mr. Speaker. A right hon. Member of this House has issued a press release complaining about action that is damaging to this House, even though he was not present and did not vote. I understand that he and his right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) were appearing on television and earning fees. Such behaviour is bad for this House. We are used to being misrepresented by the Liberals within our constituencies, but surely you can do something to protect the reputation of this House.

Several Hon. Members: rose—[Interruption.]

Mr. Speaker: Order. Hon. Members should not wave order papers at me. I am not responsible as Speaker of this House for press releases that are issued. That is not a matter for me.

Mr. David Steel: I shall happily supply you, Mr. Speaker, with a copy of the press release, and I am sure that you will find nothing in it that is out of order. However, there is another tradition in the House—

Mr. Dennis Skinner: What about the British School of Motoring? Declare your interest.

Mr. Steel: —that if one hon. Member raises an attack against another, he gives notice. I received no such notice, but nevertheless word reached me.
I do not raise with you a point of order as to why the right hon. Member for Bethnal Green and Stepney (Mr. Shore), in whose name last night's motion stood, did not vote; neither do I ask where the leader of the Labour party or the leader of the Conservative party were. The hon. Member for Northampton, North (Mr. Marlow) has given the game away. They are consumed with jealousy because my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) and I were at 10 o'clock last night appearing live on ITN—[Interruption.]

Mr. Speaker: Order. A point is being made to me, but I cannot hear it.

Mr. Steel: In response to sedentary interjections, I should add that we did so without fee, which would have been declared had their been one. As for only one member of the alliance speaking, I am not aware that it is normal for more than one member of our party to be called. As for those who voted on the amendment last night, 64 per cent. of members of the alliance parties were present but only 22 per cent. of members of the Labour party.

Several Hon. Members: rose—

Mr. Speaker: Order.

Mr. Skinner: rose—

Mr. Anthony Beaumont-Dark: rose—

Mr. Speaker: Order. I am on my feet. This is a Back-Bench day and many Back Benchers wish to speak in the debate. It would be perfectly legitimate to raise these matters during the next debate when hon. Members may put it to the Leader of the House that the House should not adjourn until we have debated Members' interests all over again. We cannot have a re-run of last night's debate during points of order. I am not prepared to allow that.

Mr. Beaumont-Dark: On a point of order, Mr. Speaker.

Mr. Speaker: If it is a point of order.

Mr. Beaumont-Dark: Will the House not hear points of order?

Mr. Speaker: The hon. Member can raise a point of order, but we must not have a re-run of last night's debate.

Mr. Beaumont-Dark: I do not want a re-run.

Mr. Speaker: I shall hear the point of order.

Mr. Beaumont-Dark: I would never challenge your judgment, Mr. Speaker, as you know. I wish only to ask for your humble guidance. [Interruption.] It is a small humbleness, then.
I want to ask what you meant, Mr. Speaker by the "best traditions" of parliamentary debates, in which most hon. Members fully believe. I thought that, on a private Member's day, if hon. Members put their name to a motion and that motion is then called in this honourable House, as two of the so-called leaders of the so-called alliance were, it would be more proper if they were here attending to their duties and your call, Mr. Speaker, instead of earning seventy-five quid plus a taxi fare.

Mr. Skinner: rose

Mr. Ron Davies: rose—

Mr. Speaker: The hon. Member for Caerphilly (Mr. Davies) has given me notice that he wishes to raise a point of order.

Mr. Davies: I wish to raise a different matter relating to events yesterday before the cause of the points of order which have been brought to your attention, Mr. Speaker. I draw your attention to the remarks recorded in column 161 of Hansard during the exchange between the Chancellor of the Exchequer and my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore). In replying to a question by my hon. Friend, the Chancellor stated:
He poses"—
referring to my hon. Friend—
as the man who got things moving … Listen to this He did not even start—Hansard will show that this is so—his seemingly unending series of allegations until after my statement of 17 July informing the House that the fraud squad had already been called in."—[Official Report, 17 December 1985; Vol. 89, c. 161.]
There is a clear implication in the Chancellor's statement that when he made his statement on 17 July he had not been pressed, encouraged or questioned by any other hon. Member. That is not true.
On 23 October 1984, my hon. Friend the Member for Bolsover (Mr. Skinner) raised questions with the Chancellor. On 11 November 1984, my hon. Friend raised a question with the Attorney-General and called on him to request an inquiry by the fraud squad. Other hon. Members, including the Opposition spokesperson, my hon. Friend the Member for Thurrock (Dr. McDonald), and my hon. Friend the Member for Hackney, South and Shoreditch raised questions with the Chancellor. My hon. Friend the Member for Thurrock wrote to the Prime Minister asking her to set up a special committee of inquiry. The reply to that letter was made five days before the Chancellor's statement. The Prime Minister declined that request for a special inquiry.
I submit that yesterday's events, as recorded in Hansard, are inaccurate. They clearly show the Chancellor's intention to imply that he had not been


pressed by other hon. Members into taking action on the banking allegations. Will you use your good offices, Mr. Speaker, to encourage the Chancellor to make a statement in the House so that the record can be put straight?

Mr. Speaker: What I can confirm is that Hansard faithfully recorded what was said in the House. I accept that the hon. Member for Bolsover (Mr. Skinner), who raised a point of order on this subject, reminded the House that he had tabled a question on 23 October. I am sorry that I did not manage to fit the hon. Member for Bolsover—

Mr. Skinner: It was 1984—that is the important point.

Mr. Speaker: —into questions yesterday.

Mr. Skinner: I know that.

Mr. Speaker: I said to him that, by good fortune, this subject had come up in the ballot for the Consolidation Fund debate. I gave him an undertaking that he would be called in the debate.

Mr. Robert Adley: On a point of order, Mr. Speaker. I am sorry that I have to make this point. Yesterday, I was the first Member—I do not wish to discuss Members' interests; I am raising a point of order—to raise with you, immediately after the right hon. Member for Swansea, West (Mr. Williams) had sat down, the question of the absence of the six right hon. and hon. Members. You said to me—

Mr. Speaker: Order. We have dealt with that matter. We cannot discuss it further. Is the hon. Member referring to the debate on Members' interests?

Mr. Adley: I am referring to what you said to me yesterday afternoon during the points of order.

Mr. Speaker: We dealt with that yesterday afternoon.

Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. You referred to the fact that Hansard faithfully records the truth. Will you confirm that Hansard records that the Liberals did not call an amendment yesterday for compulsory registration of Members' interests? Hansard records only an expression of belief in recommendations and makes no reference to compulsory registration. The amendment on compulsory registration was mine and it was not backed by the leader of the Liberal party or the leader of the Social Democratic party. Will you confirm that point for those outside?

Mr. Speaker: I can confirm that the Liberal party, as the House well knows, tabled three amendments yesterday. I was able to select only one for debate. I can confirm also what the hon. Member says about his amendment.

Mr. Skinner: rose

Mr. Speaker: Mr. Skinner, as a compensation for yesterday.

Mr. Skinner: If I or any other hon. Member wanted to raise the issue of double standards with respect to the leader of the Liberal party or the leader of the Social Democratic party, there is a way of doing so, as you have

said, Mr. Speaker. An hon. Member can write to the Privileges Committee. I should like to know as briefly as possible whether, in writing that letter, any Member who is making an application can refer—if these declarations must be made—to a Member's interests? For example, would the hon. Member for Stockton South (Mr. Wrigglesworth) have to declare all his directorships? Would the hon. Member for Caithness and Sutherland (Mr. Maclennan) have to declare that he is a representative for Encyclopaedia Britannica? Could we refer to the Japanese car that was loaned for several months to the leader of the Liberal party? Could we find out the amount of the golden handshake that went to the last leader of the Social Democratic party? Could we write in that letter that, although the alliance calls for the elimination of interests, between them the SDP and the Liberal party have 23 moonlighting jobs?

Mr. Speaker: Perhaps I can clear up this matter for the benefit of the whole House. If there are such allegations, the proper course is for the hon. Member concerned to write to the Chairman of the Select Committee on Members' Interests.

Mr. David Penhaligon: On a point of order, Mr. Speaker. Will you confirm the idea that Hansard is accurate and records what happens in the House? Will you confirm that, in the 31 Divisions this parliamentary year, the leader of the Liberal party has voted 18 times and the leader of the Labour party 13 times? Do you agree that Parliament can only work if hon. Members come to the Chamber?

Mr. Speaker: I shall take Hansard and study it during the Christmas Recess.

BILLS PRESENTED

FINANCIAL SERVICES

Mr. Secretary Brittan, supported by Mr. Secretary Younger, Mr. Secretary Edwards, Mr. Secretary King, Mr. Ian Stewart, Mr. Michael Howard and Mr. John Butcher, presented a Bill to regulate the carrying on of investment business; to make related provision with respect to insurance business and business carried on by friendly societies; to make new provision with respect to the official listing of securities, offers of unlisted securities, takeover offers and insider dealing; to make provision for securing reciprocity with other countries in respect of facilities for the provision of financial services; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 51.]

TOBACCO SMOKING (PUBLIC PLACES)

Mr. George Foulkes, supported by Mr. John Maxton, Mr. Roger Sims, Mr. John Home Robertson, Mr. D. N. Campbell-Savours, Mr. Clement Freud, Mr. Laurie Pavitt, Mr. A. J. Beith, Mr. George Robertson, Dr. Norman A. Godman and Mr. Alfred Dubs, presented a Bill to limit smoking in public places; and for purposes connected therewith: And the same was read the First time; and ordered to be read a Second time upon Friday 7 February and to be printed. [Bill 52.]

Pensioners' Right to Heat, Light and Communications

Mr. Jeremy Corbyn: I beg to move,
That leave be given to bring in a Bill to ensure the supply of gas and electricity for pensioner households; to abolish standing charges for pensioner consumers for gas, electricity and water; and to abolish telephone rentals for pensioners.
I thought that we would never reach my Bill. This is the third time that I have introduced it and I notice that many Members are already leaving the Chamber. Presumably they do not wish to discuss the way that the elderly are treated in our society.
The purpose of the Bill is to ensure that the supply of gas and electricity to pensioner households is maintained, that standing charges for gas and electricity and water for pensioners are abolished, and that telephone rentals are no longer charged for pensioner households.
The way in which the electricity and gas undertakings impose standing charges on consumers means that consumers of the lowest amounts pay, in effect, a higher unit cost for the supply of the services than the rest of the community. Yesterday, the Under-Secretary of State for Health and Social Security said:
The charges reflect the necessary cost of keeping a supply available to the consumer in his own home for 24 hours a day. They cover the maintenance of the connection, meter-reading, accounting, billing and emergency services. The costs arise no matter how much or how little gas or electricity is consumed by the individual householder."—[Official Report, 17 December 1985; Vol. 89, c. 135.]
That may be true, but the effect is that the unit cost of supply for consumers of small amounts of electricity or gas is high. They still have to pay the standing charge irrespective of how large or small the bill is. Members of this place are paying the same standing charge on their salary of £16,000 a year as a pensioner household on a basic pension income of rather less than £40 a week. There is an obvious disparity.
The Government have recognised this in the past and they introduced a rebate scheme for the consumers of small amounts of electricity and gas. So that the standing charge would be no more than half of the bill for gas or electricity. This year, all the electricity boards and gas boards have phased out that scheme on the grounds that it benefited only slightly some pensioner households and operated mainly to support those who own second homes who wish to keep on security lighting or basic heating during the unoccupied winter months. I think that second homes are a scandal anyway, and it is certainly a scandal that the scheme should have been used to assist their owners.
I am suggesting that in future we should abolish standing charges for pensioner households. Society must recognise that pensioners need warmer homes. Secondly, we must recognise that the poverty in which pensioners live arises from the disgracefully low level of the basic pension. The abolition of standing charges is one way of assisting pensioners to alleviate that poverty.
On Government estimates, the cost of the abolition of standing charges for pensioners would be £300 million. That could be well paid for by Government income, which from British Gas was £731 million, £500 million of which was the levy. The other £231 million was paid in corporation tax. The income from standing charges was

£600 million for gas and £550 million for electricity. The cost of abolishing standing charges could well be paid for out of reductions in levy payments to central Government. That would mean no overall unit increase in the cost of supplying gas or electricity. Any increase would clearly be disadvantageous to the rest of consumers as well as pensioner households.
We know that water charges have increased considerably over the past year. It is fairly obvious to many of us that the Government are increasing water charges continually, as they are increasing gas and electricity charges, as a prelude to the privatisation of those industries. There is an equally strong case for the abolition of standing charges for water supply.
The Bill proposes that the charge of telephone rentals for pensioners should be abolished. The unit cost of calls for pensioners tends to be high because they make few calls but rely on the telephone as a basic means of communication. They have to pay the same rental as anyone else and, therefore, the unit cost is higher.
British Telecom could well afford to make the concession available to pensioner households. Its profits this year are approaching £1·5 billion, and those moneys have been taken from all our purses.
The proposals which I have outlined would help pensioner households. The House should recognise the poverty in which many pensioner households are forced to live. Secondly, it should recognise that death through hypothermia is a serious problem for many elderly people. Thousands are dying each winter through hypothermia. That happens either because they cannot afford to put money in the slot meter to keep the gas fire alight or because they are too frightened of the size of the bill at the end of the winter quarter. The result is that they do not heat their homes properly.
It has gone six o'clock now and many pensioners throughout the country have already gone to bed because they cannot afford to heat their homes for the rest of the evening. That is the plight of many pensioners. If we wish to do something about the scandal of hypothermia, we should increase the level of the basic pension and recognise that the supply of gas and electricity is essential to pensioner households. The fuel boards should not be allowed to cut off the supply of either. Codes of practice are issued, but they are often weak and vague and need to be tightened and strengthened.
The House must recognise that, as pensioners become older, the need to heat their homes properly increases, even though it is estimated that well over two thirds of pensioners cannot afford to heat their homes to the required level. Their ability to campaign to make people in such places as this listen to them diminishes because of their advancing age and frailty.
We must recognise also how many of our pensioners have suffered. I remind the House that at least two thirds of pensioner households are occupied by women, who are often single. Many of them are suffering badly from the lack of a reasonable pension, which many men enjoy because they had a longer working life. Poverty in old age is partly the result of discrimination during the individual's working life.
During election campaigns, many candidates are approached on the issues of fuel debt and the cost of electricity and gas for pensioner households. I am sure that many who are successful in being elected to this place make promises to do something about these problems. I


have been contacted by many increasingly active pensioner action groups throughout the country. They have been writing to their Members of Parliament because they are no longer prepared to be treated as objects of charity and patronised. Instead, they are organising themselves and taking action to improve their circumstances. They have collated an interesting collection of replies from individual Members who support the measure which I am introducing.
I hope that the House will grant leave for the Bill to be read a Second time and will enact it. I hope also that it will do something to change the structure of gas and electricity payments. We are living in a self-satisfied age in which many of us ignore the plight of many pensioners and allow the elderly to die through hypothermia. At the same time, society ensures that they pay through the nose for gas and electricity. The Bill will not solve the problem of poverty among the elderly, but it will go some way toward recognising the plight in which they live. I hope that the House will support it.
Question put and agreed to.
Bill ordered to be brought in by Mr. Jeremy Corbyn, Mr. Chris Smith, Mr. Tony Benn, Mr. Dave Nellist, Mr. Tom Clarke, Mr. Dennis Skinner, Mr. Harry Cohen, Miss Joan Maynard, Mr. Robert Wareing, Mr. Tony Banks, Ms. Jo Richardson, and Ms. Clare Short.

PENSIONERS' RIGHT TO HEAT, LIGHT AND COMMUNICATIONS

Mr. Jeremy Corbyn accordingly presented a Bill to ensure the supply of gas and electricity for pensioner households; to abolish standing charges for pensioner consumers for gas, electricity and water; and to abolish telephone rentals fo pensioners: And the same was read the First time; and ordered to be read a Second time on Friday 14 February and to be printed. [Bill 53.]

Adjournment (Christmas)

Motion made, and Question proposed,
That this House at its rising on Friday 20th December do adjourn until Monday 13th January, and that the House shall not adjourn on Friday 20th December until Mr. Speaker shall have reported the Royal Assent to any Acts which have been agreed upon by both Houses.—[Mr. Biffen.]

Mr. Alfred Morris: I must put it very strongly to the Lord Privy Seal and Leader of the House of Commons at the very outset of tonight's debate that this House should not adjourn until such time as the Secretary of State for Transport has made a definitive oral statement on the future control and operation of Manchester international airport. It is an extremely urgent matter which has been under consideration by the Department of Transport for many months.
Manchester airport, which is in my constituency, is of paramount importance to my constituents. It is by far the largest employer. The airport's future is, as the House knows, also profoundly important to the north-west region as a whole. It is the major British airport outside London and one of the fastest growing in Europe. Its achievements as a public enterprise for more than 40 years are, by any standards and by common consent, an outstanding success story. That success is now jeopardised by what is widely regarded in Manchester as a most scandalous abuse of political power. It is essential that the House should be put in the picture before we rise for the Christmas recess on Friday.
Earlier this year, Manchester city council, which owns and controls the airport in partnership with Greater Manchester county council, had to face the prospect of losing its partner because of the Local Government Act 1985. The city was not convinced that the airport's best interests would be served by either of the options covered in section 40 of the Act. A joint committee involving 10 local authorities would be unwieldy and unsatisfactory and the transfer of the, county's interest in the airport to the passenger transport authority posed even greater problems. The objectives of the airport and the PTA were seen by people of all persuasions to be incompatible.
A concern common to both options was finance. Manchester airport, if it is to consolidate and develop the significant gains that it has made over recent years, must spend many millions of pounds further to develop and enhance its facilities. Neither a local authority nor a PTA-funded structure offered any scope for that crucial commitment to be met.
At the time that the city was considering those options, the Secretary of State for Transport introduced his White Paper on airports policy. It confirmed that the Government's intention was to introduce legislation to enforce the restructuring of local authority airports into Companies Act companies. Paragraph 9·15 of the White Paper confirmed that shares in such companies could be held, initially at least, by their local authority owners. Manchester recognised the undesirability of seeking to restructure the airport twice in little more than 12 months, and so produced proposals to create a public limited company with effect from 1 April 1986.
The proposals had overwhelming advantages: the ability to secure funding on the open market, the involvement of all the district councils in the company's


affairs, the opportunity both further to underline the commercial orientation of the airport and to place the day-to-day management of the company firmly in the hands of the airport's senior management, and leaving the responsibility for strategy and policy development where it would rightly belong—with the shareholders. All the shares were to be held by local authorities, with Manchester city council as the majority shareholder. If the case for that is fairly examined, it will be seen to be wholly reasonable in terms at once of equity, of current law and of the Government's proposals.
The PLC proposals were subsequently agreed by all the district councils in October and they were seconded by the Conservative-controlled Trafford borough council. Yet before the ink on that agreement was dry, a campaign began that is said to have involved the Under-Secretary of State for Transport, the hon. Member for Worcestershire, South (Mr. Spicer), to overturn the agreement. The aim was to deny the people of Manchester their undoubted rights in relation to the airport.
Recognising that they had little or no power to intervene, the Government embarked upon a campaign to undermine the proposals that were unanimously agreed by the district councils last October. I am reliably informed that the Under-Secretary of State spoke to Councillor Warbrick, the leader of Trafford borough council, to point out the error of his ways in having backed the October proposals. If the Under-Secretary did so, it was a most scandalous abuse of his office as a Minister, and one for which he must be made to account before the House goes into recess.

Mr. Tony Lloyd: Is my right hon. Friend aware that, as a Trafford ratepayer, I approached the district auditor and asked him to look into the behaviour of Trafford council in forgoing the asset values that it clearly wants to give to the private sector? Is he further aware that when charges are levelled about a conspiracy reaching ministerial level, that conspiracy actually goes much further—indeed, as high as the Prime Minister, who has been involved in the campaign. The hon. Member for Manchester, Withington (Mr. Silvester) wrote a letter, a copy of which is in my possession, in which he said:
The PLC cannot proceed without Ridley's report. Ridley must refuse to approve the present scheme and wait until he has powers under the proposed Bill.
There was never any intention of allowing Manchester city council and the district councils to go ahead with the scheme. It was always planned to sabotage it—the question was: who would sabotage it?

Mr. Morris: My hon. Friend makes an important intervention. I hope that the Leader of the House will examine the document to which he referred. There is a smell of scandal. I have not myself seen all the documents. However, I know that in Greater Manchester there is strong feeling that there must now be an urgent inquiry into a matter which is of the first importance for ratepayers throughout the conurbation. My hon. Friend mentioned his approach to the district auditor, which emphasises the importance of the matter for Trafford ratepayers. I hope that the Leader of the House will not minimise the importance of this very serious matter for Greater Manchester ratepayers as a whole.

Mr. Ken Eastham: This is an important issue. I make the special plea that my right hon.

Friend impresses upon the Leader of the House that when we speak about the high finances and the high investment of Manchester airport, the lion's share of the investment surely can be claimed to belong to the city of Manchester. It was only in 1974, during the reorganisation, that one tenth was apportioned to Trafford. Is it not important to recognise that, because of the very high investment of the city of Manchester, it would be a travesty of justice if the Government went against the wishes of the Greater Manchester area?

Mr. Morris: My hon. Friend speaks with considerable authority on this matter. For many years before coming to the House he was a distinguished member of Manchester city council. As he said, the airport was conceived and founded by the city council. We owned it and controlled it. We lost half of our property when the Greater Manchester council came into existence. As my hon. Friend said, it would be a travesty of justice if the people of Manchester were to be denied their rightful stake in the premier asset of the region.
Either the Under-Secretary spoke to Councillor Warbrick behind the backs of everyone involved in the matter, or he did not. After the Under-Secretary spoke, as I am informed, to the Trafford leader, the Department of Transport, which hitherto had adopted a constructive approach to the proposals, suddenly became hostile. There is no doubt that the Department's change of approach clearly reflected the Minister's opposition to what had been unanimously agreed by the district councils last October.

Mr. Peter Snape: Does my right hon. Friend agree that the original proposals were, in fact, seconded by the representative of the Trafford borough council, the authority which is now refusing to ratify them? The pressure to refuse to ratify undoubtedly came both from the Under-Secretary responsible for aviation matters and from Back-Bench Conservative Members, none of whom are present this evening. By behaving in such a way, they are directly prejudicing the future of Britain's premier regional airport. Their action is that habitual mixture of spivvery and ideology that typifies the Government's approach to aviation and other matters.

Mr. Morris: I am very grateful to my hon. Friend who is extremely well-informed on such matters. It is eminently true that the Tory leader of Trafford council seconded the proposal that was agreed unanimously by the district councils in October. After the Department of Transport's change of approach, it became clear that Trafford, which had seconded the proposals, wanted to appease the Minister. Trafford council then described the proposals as a sham and demanded that the airport be privatised.
That was the attitude of a council which had seconded the proposals, as my hon. Friend the Member for West Bromwich, East (Mr. Snape) said, as recently as October. Its change of attitude shows the extent to which the authority's leadership was pressurised by senior Conservatives. That must have happened; otherwise why did Councillor Warbrick originally second the proposals in October?
I must point out to Councillor Warbrick and his colleagues on Trafford council, and to the House as a whole, that the only sham is the Government's White


Paper on airports policy. The Government are being grossly misleading when they say that there is no compulsion on local authorities to sell shares in airport companies. Local public representatives took that statement as being honourable and they genuinely tried to put together a package acceptable to all the parties. They now appear to have failed in that attempt, because the Government reneged on their commitment.
Manchester produced a reasoned response, backed wherever possible by expert independent advice, to each of the points raised by the Secretary of State for Transport about the October proposals. The response was intended to secure the best interests of the airport, and the reward has been political manoeuvring of the most odious kind.
There is now nothing but anger and frustration in Greater Manchester about the position in which the airport may find itself as a result of the Government's political intervention. The airport may be forced to work with an organisation which has motivations and concerns which differ fundamentally from its own. There is no certainty that the airport's growth will not be hindered, because the PTA will be severely cash limited. All the districts will also be prevented from participating in the airport. That will be the end result of all the manoeuvring that has taken place behind the scenes. Those who intervened to undermine the unanimous decision of the district councils last October may feel that it is a job well done. The people of Greater Manchester, however, will not forgive them for jeopardising the future of our region's most important asset.
I ask the Leader of the House for a clear undertaking that there will be an oral statement by the Secretary of State on the future control and operation of Manchester international airport, either later today or, having regard to the commitments of northern hon. Members, at the very least tomorrow.

Sir Philip Holland: You may, Mr. Deputy Speaker, find it difficult to believe that I have a very charming eight-year-old granddaughter named Claire. Last summer for her birthday she expressed a wish to see me at work, so my son brought her along one evening to the Strangers' Gallery and I dutifully took my seat in the Chamber.
The business of the House on that occasion was, as I recall, the Report stage of a non-controversial Scottish Bill. I must confess to you, Mr. Deputy Speaker, in the strictest confidence, that I found the proceedings dull and almost entirely incomprehensible. That may have shown on my face because after five minutes in the Gallery my granddaughter said to her father, "Well, I can see him sitting there, but what is he doing?" Her father, accustomed to her penetrating questions, promptly replied, "He is listening to what they are saying so that he will know what to do." That is precisely what I hope my right hon. Friend the Leader of the House is doing at the moment.
I hope that my right hon. Friend will consider not pressing his motion today and will bring back a slightly revised one tomorrow that would allow time for a full day's debate—in addition to the business already planned—on the subject of non-departmental public bodies or, to put it another way, quangos. The House

would not be entirely hostile to curtailing the Christmas recess by one day so that we might have a full day's discussion on that important subject. We could then formulate a plan for a new initiatitve to provide fresh impetus to the quango cull which presently has all the appearance of running out of steam.
In an effort to persuade the Leader of the House to consider modifying the Christmas recess dates, I should like briefly to explain why the time is ripe for such a debate and why it is of sufficient urgency to justify delaying the rising of the House.
As my right hon. Friend and other hon. Members may have noticed, I have for 10 years enjoyed participating in the sport of hunting that wily, sleekit and sometimes timrous beastie the quango. For the first four years I made little headway, but I occupied my time usefully in studying its habitat, its nature and its psychology. That bore fruit during the next five years. Steady progress was made in reducing the total—

Mr. Robert Kilroy-Silk: There are more than when the hon. Gentleman began.

Sir Philip Holland: If the hon. Gentleman will have patience, he may learn the true figure.
Steady progress was made between 1979 and 1984 in reducing the total by more than 700, in spite of the birth of nearly 100 new quangos. The new willingness on the part of Government to open up to public and parliamentary scrutiny the numbers, nature and cost of those bodies was of great importance in that period.
First the Civil Service Department, and later the Management and Personnel Office, published an annual list of public bodies, giving details of revenue from the main sources, the number of appointed "Quangurus" and the emoluments paid to each. That has now become an established annual practice; the latest publication for 1985 was published yesterday and is an excellent report.
More quangos have become subject to the attention of the Comptroller and Auditor General and I welcome that. All quangos are now open to investigation by the departmental Select Committees—though I fear that by and large those Committees seem to have little time to consider such matters as they perhaps do not have sufficient publicity value.
A most important innovation was introduced on 20 October 1981 when the Civil Service Department issued a code of practice entitled "Non-Departmental Public Bodies: A Guide for Departments". That publication was concise and succinct and it gave clear, simple and unequivocal directions and guidelines to Departments and opened up the whole subject to more detailed probing in the House than had previously been possible.
In November 1984, the Cabinet Office, in collaboration with the Treasury financial management unit, published a report called "Financial Management Initiative: Non-Departmental Public Bodies". In announcing that publication, my right hon Friend the Prime Minister said:
Over the next two years, therefore, Departments will be looking, in collaboration with the management of their sponsored bodies, at the scope for improving management and control systems and practices, with the aim of producing progressive improvements in performance."—[Official Report, 19 November 1984; Vol. 68, c. 58.]
My right hon. Friend also said that some bodies needed better systems for setting targets and assessing achievements.
The main programme is due for completion in April 1987. Last year I understood that that would be monitored by the Chief Secretary to the Treasury and the Chancellor of the Duchy of Lancaster. Since then there has been a Government reshuffle and both the Chief Secretary and the Minister in the Cabinet Office have been transmogrified. I fear that such monitoring of the programme as may have been in progress in the spring and early summer may have become lost as a result of the change.
During the past year there has been a marked change of tempo in the quango cull. Apart from a welcome cull of the nationalised industry boards, some lassitude seems to be besetting the Departments in their attitude to and enthusiasm for slimming and trimming the quangos and their numbers. There is also, to put it mildly, an increasing danger of Ministers being beguiled into creating new ones.
After a crescendo of activity for five years from 1979 to 1984, there has ensued a mere trickle of 28 abolitions during the past year. That has been recognised to some extent by the Management and Personnel Office, which produced a much larger edition of the code of practice three months ago. However, with my suspicious nature, I believe that in that context a larger code of practice might just mean a more verbose one. My cynicism tells me that it could just possibly be a great Whitehall ploy to smother its objectives under such a cloak of verbiage as to dilute and diffuse the guidelines so that the discretion of those whose task it is to interpret them may become unlimited.
Therefore, the appearance of waning enthusiasm for the quango cull, suspicions about the long-term aspirations of Ministers and their Whitehall advisers and what seems to be a growing threat of a return to the old order—that is to say, a reversion to the 1978 status quo—create the need for early consideration of those matters by the House.
I ask my right hon. Friend the Leader of the House to think carefully before he seeks the approval of the House for the motion. If he cannot find time for an early debate on quangos, I hope that he will seriously consider reducing our Christmas recess to make such time available.

Mr. David Penhaligon: I should like to use this opportunity, which is made available by this semi-unique occasion, to draw to the attention of the House a tragedy that is developing in my county. I believe that I should be failing in my duty if I did not raise the matter on the Floor of the House before it goes into recess. The subject is the great difficulties faced by the Cornish tin industry.
Some 3,000 families in my county will have their Christmas ruined because of the doubt, anguish, fear, worry and speculation created by the current situation. I should like to put a simple question to the Government. In the final analysis, will they offer financial support to the Cornish tin industry? I am not pushing for specific details tonight of any particular scheme, but pleasure could be restored in many households if the Government said tonight, or at least before the recess, that assistance was forthcoming. Alternatively, will the Government take the risk of seeing the end of 2,000 years of extracting tin from my county? Will the only tin industry in the world to be shut down be the one in Cornwall? Are the Government willing to take that risk? That is the scale of the risk, and of the fear and despair in our county.
When one considers what has happened, one can understand the amazement of some people at how the

situation has arisen. Just seven weeks ago, tin was being freely traded on the London metal exchange for £8,500 a tonne. At the turn of the year, it was being traded at prices that were sometimes over £10,000 a tonne. The industry announced its largest output this century in terms of quantity of minerals, not cash value. Various mires were developing their facilities or seeking planning consent to develop new mines. In my constituency, Concorde and Cligga are both in various stages—one is developing and the other is seeking consent to develop.
The prediction in my part of the country that the world demand for raw materials must lead to a redevelopment of hard rock mining in Cornwall seems to be coming true after a decade of steady and apparently never-ending progress. Tin, silver, zinc and lead are mined in large quantities, and the county is likely to produce tungsten in the not too distant future. The key to all those minerals is tin, because it is the most valuable mineral, and in every mine tin is a part of what is produced. If the tin goes, the rest of the industry goes as well.
To date, the Minister of State, Department of Trade and Industry has met two delegations, in which the hon. Member for St. Ives (Mr. Harris) and myself took part. Neither of us would complain about his attitude. He listened with interest to our account of the peculiarities of the mining industry in the far south-west. I do not think that the Minister would complain if I paraphrased his reply to us. Basically, he said that the Government were actively trying to sort out the international tin agreement in the International Tin Council and trying to get people involved, so that they faced their debts and responsibilities. He said that when the Government had done that, they would try to look at the situation in Cornwall.
Trading ceased at the end of October. It might start again in early January, but it will not start before then. People to whom I talk in the industry believe that a much more likely date for tin trading to start is early in February, which represents three or four months' uncertainty. When the trading restarts, there will be another three or four months' uncertainty until the price settles down to a price that is likely to be sustained for a substantial period. If nothing more than that happens, substantial parts of the industry will be eradicated by that time. Not many in the industry would doubt that. Geevor mine in the constituency of the hon. Member for St. Ives has given four fifths of its employees provisional notification of redundancy. Other mines—Wheal Jane, Pendarves and South Crofty—are big and play a major part in the local economy. They are currently taking decisions and wondering what will happen.
Mining is not a lame duck industry in my county—far from it. Last week ECLP, a china clay company in my constituency, declared a profit of £75 million this year. I estimate that about £50 million of that profit was made by exploiting the clay deposits in my constituency. If other extractive industries in Britain had the record of mining that my county has, we would have fewer financial difficulties.
The tin industry is in an area of endemic unemployment. I do not want to bore the House with figures, but I shall reel out the male unemployment figures in the travel-to-work areas most affected, so that one gets the feel of the local situation. In Falmouth, the figure is 24·9 per cent. in St. Ives and Penzance 26·1 per cent., in Redruth 22·8 per cent. and in Helston 23·6 per cent.


Virtually one quarter of the male population is unemployed. If the mines go, the figure will be substantially more than that.

Mr. David Harris (St. Ives): The hon. Gentleman mentioned Geevor in my constituency. Does he agree that the situation there is particularly desperate, in that the economy of the St. Just and Pendeen area is almost totally dependent on that mine? There is tourism and agriculture, but the livelihood of those villages and the one town is dependent on that mine.

Mr. Penhaligon: I confirm that that is correct.
I should like to make this rather urban House aware of the distances involved. St. Just is six or seven miles from the nearest town of any size, and real employment opportunities are 40 or 50 miles away. Three hundred jobs might not sound much to the House, but in a remote part of Britain they are the keystone of the local economy.
The industry is not a lame duck. It is in difficulties now, but it has been making profits over a sustained period, and most people believe that it can again, with assistance. The industry pushes some £27 million into the local economy, through pay and services. When trading ceased the value of the tin sold was £52 million a year, not including the other minerals, which are also valuable.
We want to know whether help will be forthcoming. We are not expecting details, but there is a great deal to be said in discussing the best ways to help. There could be some help towards capital investment to enable the industry to improve efficiency and to produce this valuable mineral at a competitive price. The Government could give some assistance in the development of new ore bodies. Hard rock mining is a two-stage process. One half of the mine takes the ore out to the mill to be crushed and processed, and the other half of the mine opens shafts, drives and stopes to mine the tin. The Government could offer some medium-term price support mechanism against the value of tin.
The real question tonight—for peace of mind at Christmas and in the new year—is: will the Government help? It seems inconceivable to those involved in the industry that Thailand, Malaysia, Bolivia or Brazil will allow their industries to be wrapped up and put into the history books. There is some risk that our Government will allow Europe's only supply of this mineral to close permanently. If a mine is closed and it floods, there is no future for that mine. The hon. Member for Swansea, East (Mr. Anderson) will be glad to confirm that.
Recently, at Prime Minister's Question Time I asked two questions: will the Government assist, and will the Prime Minister receive a delegation? The answer was not unexpected. The Prime Minister, once again, said that the Government were trying to encourage the Tin Council to find a sensible settlement of the difficulty in which it finds itself. That is a strategy to save the London metal exchange, and is of no help to those who live in Cornwall. It may well help to keep the London metal exchange within London, but it will certainly not help the industry within my constituency. Surely the Government are not saying that traders in tin are more important than those who produce the mineral.
I wish to seek from the Minister a broad-based assurance that some assistance will be given to the Cornish

tin mining industry in its present difficulties. If the Minister can give the assurance that the situation is not terminal, people in Cornwall will have a much happier Christmas.

Mr. Peter Viggers: I followed the speech of the hon. Member for Truro (Mr. Penhaligon) with interest. I know that his concern is shared throughout the House, but I hope that he will forgive me if I do not take up his points.
I urge that the House should not rise for the Christmas recess until we have had a further opportunity to consider the threat to the position of young people and the family. I wish to illustrate my point with a true story which I was told last Friday at my constituency surgery. I was consulted by considerate, caring, responsible parents who, a year ago, had a 16-year-old son whom we shall call David. Their son was an intelligent boy who had O-levels and was working in a multiple store as a trainee. His parents expressed concern that he was attracted by the fact that he could, if he wished, leave home and gain board and lodging allowance of £55 a week plus £9 pocket money. That caused some mild family disharmony—not at all unusual in a family with teenage children. The parents found this carrot, in the form of a Department of Health and Social Security allowance, to be the cause of great difficulties since their son was tempted to leave home.
A year ago the parents' worst fears were realised, and the boy left home. The parents were concerned that he should wish to do so but, as they were caring and responsible, they took him to the hostel where he was to stay. Arrangements were made by the boy to receive DHSS payments. When the 16-year-old lad left home the DHSS made no effort to establish whether he needed to leave home or whether he had a home in which he could stay. A 16-year-old is entitled to benefits and it is none of the parents' business.
A few weeks passed and the boy, now 17, went missing from the hostel where he had been staying. The parents, who had been maintaining a tenuous contact with him, were distraught. They attempted to find out from the lodging house the whereabouts of their son, but the lodging house did not care. The DHSS may well be paying the lad for staying in a hostel elsewhere, but it would not tell the parents anything. For three weeks the parents were faced with this distressing situation. They were then contacted by the police, who had found their son's bag which had their address inside it. The police attempted to reassure the parents, despite the fact that they did not know his whereabouts. Imagine the parents' feelings when their son's bag had been found, but he was still missing and the police did not know his whereabouts.
Later the parents discovered—I use the word "discovered" advisedly—that their son, aged 17, had been charged with a criminal offence. They were not told this by the police, by the probation service, the court or by any other authorities. They had to find out for themselves. In Britain someone aged 17 is deemed, in the criminal courts, to be an adult. If a person aged 17 is in trouble with the law and tells the police that he does not wish his parents to be consulted, the police will abide by that wish.

Mr. Kilroy-Silk: It is not just that the parents are not consulted: they do not have to be informed.

Mr. Viggers: As the hon. Gentleman says, they will not be informed. If parents make inquiries they will not be told when their son will appear in court or even the exact nature of the offence.
At present David's parents do not know where he is living. The DHSS may know where he is staying, but will not say; the police may know where he is, but they will not say. Thus, the parents, the two people in the world who care most about this boy, cannot discover where he is and cannot do anything to help him.
How did we get ourselves into this situation? The DHSS and the police—they serve us very well in south Hampshire—are obeying the restrictions and rules laid down by this House. How is it that Parliament can be responsible for this framework of regulations against which this tragedy has been played out?
The first problem is that a person aged 16 is regarded as independent for DHSS benefit purposes. In Germany, someone aged between 16 and 18 can go into lodgings and apply for benefit. However, the authorities make sure that the parents are informed of his whereabouts because the authorities will recover the cost of the benefit from the parents. In Britain, a 17-year-old is regarded as an adult under criminal law. A probation officer in my area said that, if a 17-year-old does not wish his parents to be informed of his whereabouts,
We have to respect his wishes.
In the Gillick case, it was laid down that the rights of parents dwindle as offspring approach the age of maturity. I am not concerned with the rights of parents because the parents in question are not trying to assert any rights. They are trying to fulfil their duty. It is insane that we should prevent parents from exercising their duty. We have gone collectively mad.
I am horrified by the facts in this case and by the light they throw on Parliament's attitude to the family as the basic unit of society. Current social and legal practice seems designed not so much to undermine the family as to deny its very existence. As the family festival of Christmas approaches, we should resolve to give more support to the family so that the members of a family give more support to each other.

Mr. Robert Kilroy-Silk: I should very much like to follow what the hon. Member for Gosport (Mr. Viggers) has said as he dealt with an interesting and important subject, but instead I shall protest that the House should not adjourn for the Christmas recess until we have had an opportunity to debate the continuing and appalling unemployment on Merseyside, not least in my constituency.
The two subjects are not unrelated as many young people are unemployed and an increasing number of them have to leave home to get the financial benefits that are available from the state. The result is the break-up of families, which is manifest in Merseyside and my constituency. What the hon. Gentleman complained of is happening on an ever larger scale because of the economic policies of the Government that he supports.
I do not have to remind the House of the scale of unemployment on Merseyside. Nor do I have to catalogue the factories that have closed in the past six years or state the number of redundancies or job losses. The facts should be familiar. I hope that I do not have to remind hon. Members that 140,000 people are now unemployed on

Merseyside. That represents 20 per cent. of the population. I remember when I and my right hon. and hon. Friends complained bitterly when unemployment on Merseyside was as low—as it now seems—as 70,000. No fewer than 20,000 people are unemployed in the small two-Member borough of Knowsley. There are 10,000 unemployed in my extremely small constituency and more than 1,600 of them have been unemployed for more than five years.
On Merseyside, and especially in my constituency, we have road after road, industrial estates, old industrial areas and factories which were once occupied and productive standing empty, vandalised, derelict and, in many cases, razed to the ground. Whole areas such as Kirkby have multi-storey blocks of flats in which no one has a full-time job. There are streets—indeed virtually whole areas—where not one person is earning a living. That is appalling. I know that all this has been said before, but there are still many hon. Members, not least Conservative Members, who, through no fault of their own, represent much snore prosperous constituencies. They have no conception of the long-term, grinding poverty that is to be found in many parts of Merseyside, Liverpool and my constituency.
For example, 96 per cent. of people leaving school this year did not find a job. Only 4 per cent. went into a full-time job. That does not include the more than 5,000 in Knowsley who are in temporary employment schemes. Such levels of unemployment and such long-term unemployment leads to the winding down of whole areas. It manifests itself in shops closing. Even food shops that belong to major chains cannot sustain a profitable existence in my constituency. We have come to a sorry pass when people cannot buy enough food to sustain a food shop in a large town such as Kirkby.
This cannot go on. Why should my constituents be deprived of the opportunities that are available to others who, through accident, live in more fortunate parts of the country? Why should young people in my area suffer the injustice of their lives being destroyed or blighted? Why should they have to go straight on the dole having left school, get married on the dole, have children on the dole and face living permanently on the dole? That should not happen, and they know that it need not happen. It is not as though we are foisting inequities, inequalities and injustices only on certain parts of the community. If we continue like this, the social problems that we have witnessed will be as nothing to those that we are likely to experience in the future.
My constituents know that they do not have to be unemployed. They are not stupid. Indeed, some are very well educated. They know that the provision of jobs is a matter of Government will. They look around them and see inadequate housing. They see the paucity of social, welfare and health services. They see empty hospitals and unemployed doctors and nurses in dole queues, while in their neighbourhood people are dying in agony or distress on the waiting list. They see unemployed building workers, electricians and plumbers. They see old, inadequate and vandalised housing in need of repair. They know that it is possible to match the needs to the resources and that the result would be an improvement in the quality of life in the area and permanent jobs for them, their family and friends. That is possible, and they know it.
My constituents see evidence of a much more prosperous and materialistic southern part of the country. They see it every night on the television. They see it on


television advertising. They see a Martini style of life which is available to the vast majority of the country but not to them. Nobody can be subjected to grinding poverty, humiliation, indignity, loss of self-respect and no prospect of employment, while the aspirations that others take for granted are held up to them, without feeling bitter and resentful. There is such a dichotomy and of course they are deeply bitter and deeply resentful.
The surprise is not that we have had riots or disturbances. They happen much more frequently than we know. They might not be a nightly occurrence in my constituency, but it is not far off. They might not be on the scale of Toxteth or Tottenham, but they are serious and people are constantly being injured. We cannot create the circumstances that I have described and imagine that people will not react. We are storing up enormous trouble by creating a large pool of unemployed young people who know that things do not have to be so bad, have no stake in the country's future, no hope of a job and the dignity and self-respect that comes with it, and no hope of being able to lead a life such as their compatriots take for granted. That is wrong and will lead us into a great deal of trouble.
On those grounds alone it is incumbent on the House to have an informed and sensible discussion of the scale of unemployment and the poverty which accompanies it on Merseyside and in my constituency. We must come forward with practical and positive proposals to deal with the problem now—it can be dealt with now—and to give my constituents some hope. If we do not give them hope and the feeling that they belong to our community and that it cares about them, they will take their revenge. When their revenge comes, it will be horrendous.

Mr. Colin Moynihan: In many ways the subject that I raise for consideration this evening is the most important one on which I have ever addressed the House. It relates to the relationship between a Member of Parliament and his constituents.
That relationship has long been nurtured, protected and valued. It has grown substantially in the volume of work during the past 15 years, to the point where hon. Members are often effectively ombudsmen between powerful institutions, such as the boroughs, which in many cases have burgeoned in size and power on the one hand, and constituents on the other. Anything that threatens that relationship should receive the urgent consideration of the House and a full day's debate before the Adjournment.
To assist the House, I shall place on record the series of events that have led to the blacking of correspondence between Lewisham council and me, when I write to it on behalf of constituents. That action is carried out by NALGO members working for the council. Such trade union action is neither legitimate nor constitutionally acceptable.
During the past year I have had cause to bring to the attention of the council housing department its substantial delays in answering correspondence from my constituents who have written to me requesting information. If one assumes a week's turnround for answering a letter, the 10-strong member support group are 3,000 working days

overdue to date with my inquiries alone if one adds together the number of days overdue for each letter. They are important inquiries.
On 16 July I sought
a full reply as soon as possible
about a case concerning a couple. On 21 October I sent a letter relating to
obvious stress with four children in one bedroom.
On 16 October I requested a reply about eight people in a two-bedroomed house which I described as
a serious and urgent case.
On 20 December 1984 I reported "major problems" of a constituent. In all cases I requested information, but received no reply.
It is wrong when a Member of Parliament, in confidential dealings with a constituent, cannot take the case further either with the constituent or, with his permission, the press, or, at his request, in Parliament, for lack of information. The substantial delays led me last Thursday to telephone the council housing department about yet another long-overdue case. When my office contacted the allocation officer—one of the housing managers—she informed my secretary that she was instructed to transfer any calls from me to the NALGO shop steward for the support group. My office was informed that since 13 November—more than a month before—a motion had been passed to black all my correspondence, subject to decisions being taken at shop level. That had taken place in the members' support group. For more than a month neither NALGO nor any of the officers of the council informed me of that decision.
When I telephoned the NALGO shop steward, he said that because of my
supposed business dealings with South Africa",
the local NALGO branch had decided that my mail to the council was to be intercepted, a mailing list drawn up, and a reply sent direct to the constituent concerned, without my knowledge or permission. Such a reply would include NALGO's reasons for blacking my correspondence. Such a process had already been partly implemented without NALGO, the council officers or the chief executive, who was also aware of this. informing me either verbally or in writing of their action.
That is a gross abuse of the correspondence of the man in the street, and, for my part, it is a gross interference in the relationship between a Member of Parliament and his constituents. I would make no distinction in my condemnation and anxiety should such action be taken by a council against a Labour Member because of his personal or political views. That is a matter for the electorate, not NALGO shop stewards.
For a month, many written representations to the council housing department have, without my knowledge, continued to be misappropriated, as the housing department has never sought to obtain my permission to use correspondence for any purpose other than to reply direct to me, as I have outlined in my written requests to them.
The weakness and temerity of council officers in the face of NALGO's grip on Lewisham council are regrettably self-evident. The fact that the chief executive was seen to take action only yesterday after I had insisted that a written undertaking be given to me that no employee of the council would be allowed to make use of any information obtained from correspondence in the way set out in the NALGO draft, the fact that his action is limited


to that, and not to the central point about blacking correspondence, the fact that the allocations officer could not speak to my secretary, but had to pass the call on to the NALGO shop steward, and the fact that an important meeting scheduled for today to discuss urgent cases, some of which I have alluded to indirectly, was called off by the housing manager because NALGO refused to give her the necessary files, make it clear that NALGO runs Lewisham council. Regrettably, come May of next year in the borough elections the electorate of Lewisham will have a clear choice—Conservative or NALGO.
It is only fair to place on record NALGO's anxieties. The only public record of its anxieties was expressed in a document published on 27 November, entitled "Viewpoint Lewisham Nalgo." It stated that its actions were part of a
policy of non-co-operation with individuals who are helping to prop up the racist regime"—
I certainly have not—
by having investment in South Africa"—
which I certainly have not. The document continues:
One such individual is local Tory MP for Lewisham, East, Colin Moynihan.
That is not true.
He is Chairman of Ridgway's Tea"—
that is not true—
a holding company for Tate and Lyle"—
that is not true—
which is South African based.
That is not true. It is pitiful that NALGO can use my constituents as political pawns and not even get its case right. Not one phrase of that document is right. I regret that NALGO cannot even spell my name correctly in correspondence.
I have declared an interest in the House regarding Ridgeways and Tate and Lyle, but never in its 150-year history has Ridgway had business dealings in South Africa. Of the five companies which I am informed have business activities in South Africa under Tate and Lyle, four were sold more than six years ago, and the fifth, a small company in Durban, handles molasses, as much for South Africa as for Swaziland and Zimbabwe. Does Lewisham NALGO know better about southern African politics than Mr. Mugabe does?
All hon. Members know that any accusations directed to me of racism, of propping up the apartheid regime or of supporting South Africa, are wholly inaccurate. I abhor apartheid and reject racism completely. I have views which may differ from those of hon. Members who might prefer an extremist resort to armed struggle, combined with a complete imposition of sanctions, which is the declared aim of NALGO in Lewisham. If that is their view, I respect the fact that it is different from mine. Equally, in our system of representative government, NALGO should respect freedom of speech, the rule of law, and the will of the people expressed through Parliament, and, in particular, through the ballot box.
Of far greater significance than the political or personal differences of opinion that separate a union or a far Left councillor from a Member of Parliament is the future relationship between an elected Member of Parliament and his constituents. Community politics is a growing phenomenon. Hon. Members differ in how far they should be involved in local issues. Some leave local matters exclusively to local councillors. If the local council is effective, that is fine. Others, like myself, believe that in an inner-city constituency, such as Lewisham, it is incumbent on the hon. Member to turn every paving stone,

to take up personally every justified case and to do as much helpful work as possible on housing and other problems, irrespective of the personal and political views of the constituent.
That fundamental tenet of representative government is now jeopardised by union action. It is the constituents who will suffer. NALGO would do well to recognise that constituents who come to me about housing matters do so because they fail to get satisfaction from the housing department. They come to me as a last resort, often distressed and in need of moral and practical support. Because they are upset and frustrated by the combination of rudeness and inefficiency of the housing department, they seek my assistance. When I have had the opportunity to help, many cases have been successfully resolved. Many have not, but we must try equally on everyone's behalf. Many of those successful outcomes are now denied because constituents do not have the benefit of answers to my correspondence with the council. Without that knowledge, I cannot reply to the constituent to advise him.
Unless the problem is tackled now, for the benefit of both sides of the House, the constituents will suffer. What is worse is that the problem could increase, which would threaten our role as Members of Parliament. Is it right that we should have a political system under which the electorate expresses its view through the ballot box, but the local trade union can veto such an opinion? Is it right that the council should decide whether a policy is satisfactory to the Member of Parliament, whether it is satisfactory to NALGO and whether to employ a veto? Is it right to deny a Member of Parliament access to the information that he needs at his fingertips? I believe that it is not. I firmly believe in taking up constituents' cases and moving round the constituency to try to help. We are restricted greatly in what we can do, but we should at least attempt to solve, to the best of our ability, any constituent's problem, especially in the inner cities, where housing problems constitute over 90 per cent. of my cases.

Mr. Stuart Holland: Yes, because of cuts.

Mr. Moynihan: Some individuals have come to see me about problems arising from a lack of resources for housing. That shortage can be attributed to money being siphoned off by the council and not used in the best interests of constituents. That is a political point, and is not the reason for my asking the House to consider the implication of the principle. The principle is whether a Member of Parliament should be allowed access to a council's information to assist his constituents.

Mr. Anthony Beaumont-Dark: My hon. Friend makes a proper point. It is not a matter of cheap political points or whether Government money is available for one area or another. It is a matter of whether a Member of Parliament is impeded in his duties because somebody else wishes to use political means to stop him serving his constituents. My hon. Friend is right to press the point that he serves his constituents more than he serves an esoteric interest abroad.

Mr. Moynihan: I hope that I have made that point clear to the House. The issue does not rest on political grounds. The matter should now receive the closest attention and consideration of the House. I look to the Opposition and the Government to recognise the implications of my remarks.
I intend to explore every avenue available to serve once again my constituents to the best of my ability. If I do not succeed, the House must consider the implications that blacking an hon. Member's work have for the future working of this House.

Mr. Stuart Holland: I submit that this House should not adjourn for the Christmas recess until it has had the chance to debate the important question of corruption in small charities in the London area, especially the St. Olave, St. Thomas and St. John United Charities, to which I shall subsequently refer as St. Olave. This is an ancient charity in south London. In its current form it was established from an amalgamation of three Bermondsey parish charities in May 1939 with the purpose of helping the poor and elderly of Bermondsey. It has recently been seeking to sell property in my constituency.
I first drew attention to the activities of this charity in February 1985 when members of Vauxhall Labour party discovered that a block of flats had been advertised for sale in Kennington in the South London Press. On further investigation the flats were found to be offered for sale by the charity. It soon became apparent that none of the tenants in St. Olave's mansions knew that their homes were to be sold. Many were elderly and concerned for their future. Many had been bombed out during the blitz in Bermondsey and had lived in St. Olave's mansions all their lives. On meeting them it was quite clear that the charity had been a very poor landlord. Very few repairs were being done and the flats were run down. Contact with the charity proved difficult, if not impossible, for the tenants. All inquiries were handled by the clerk of the charity, Mr. Phillip Pollock—a name that will recur in what I have to say. It is to his misconduct and not to that of the trustees—several of whom, I stress, are blameless—that much of my speech will be addressed.
At the same time as secretly selling St. Olave's mansions, the charity was engaged in a peculiar exercise of preventing legally appointed trustees from Southwark council from participating in its affairs. St. Olave, in the memorandum of association 1939, had 13 trustees: eight appointed by the local authority, four co-opted by the trustees themselves and one ex officio.
In November 1984 Southwark appointed five new representative trustees to serve a five-year term of office from December of that year. The majority of the existing trustees refused to accept them. No explanation was given for this refusal, and the five new trustees were prevented from attending any meeting of the charity.
At that stage, I contacted the Charity Commissioner to express my concern regarding the activities of the charity and suggested that he investigate its affairs. I wrote to him in February of this year and had a meeting with Mr. Denis Peach, one of the chief Charity Commissioners. Mr. Peach seemed blithely unconcerned about this particular charity. On 1 March this year he informed me:
in our dealings with the Charities (St. Olave's) Trustees over many years we have found them fully alive to their responsibilities and to the need to take expert advice in relation to sales of trust property.
That reply certainly did not resolve my suspicions, particularly after I had the opportunity to examine the accounts of the charity for the year ending 31 March 1984

—the latest available. From an income of £160,000 the charity had spent£51,000, or 31 per cent. of its income, on management expenses. The poor and elderly of Bermondsey, for whom the charity was originally established, received in the same year less than £15,000, or only 9 per cent. of its income.
Meanwhile, the five new local authority nominated trustees were still trying to attend meetings and were still being denied access. On 18 March this year I went with them to the offices of the charity at Druid street, SE1, when four of the five new trustees attempted to sign the record book of the charity and become accepted as trustees. Mr. Pollock, the clerk, refused to let any of these legally appointed trustees sign the record book, despite an assurance from a Southwark councillor, John Fowler, and myself that all five trustees had been legally nominated by Southwark council. It was only in April 1985, after a threatened court injunction by Southwark council, that the charity finally accepted those new trustees. But it soon became clear why there was so much resistance from Mr. Pollock to their appointment.
As well as owning property in Kennington in my constituency, the charity owned a substantial amount of property in Fairlawn park, Sydenham. There, too, there have been many complaints about its record as a landlord. With the assistance of the South West Law Project and Paul Foot of The Mirror, the tenants of Fairlawn park found that the company responsible for carrying out all the repair work for the charity was called Flowerbrook Ltd. That company, established in June 1984, had only three directors—a Mr. Brian Glen, Mr. Barry Rosomon and the clerk to the St. Olave charity, Mr. Phillip Pollock. Mr. Pollock had failed to inform the trustees that he was a director of the company responsible for the repair and maintenance of the charity's property, yet in 1983 and 1984—in the latter year I restate that the charity had disbursed less than 10 per cent. of its income to its alleged beneficiaries—it spent more than £120,000 with Flowerbrook in the project on Fairlawn park alone.
The charity was also trying to sell the properties in Fairlawn park, and the trustees were informed that only one bid had been received, of £432,000—or £11,000 1,000 a house—from Silvercount Ltd. The tenants, informed of the sale only at the last minute, were willing to pay up to £17,000 a house. The directors of Silvercount were Mr. Brian Glen and Mr. Barry Rosomon. As well as being a co-director of Mr. Pollock in Flowerbrook Ltd., Mr. Rosomon had other connections with the charity. Until 1984, his father was a trustee of the charity and his mother was assistant clerk to Mr. Pollock.
Increasingly alarmed at the activities of Mr. Pollock and the inaction of the Charity Commissioner, I tabled a parliamentary question to the Attorney-General on 25 July, requesting him to instruct the Charity Commissioners to conduct an inquiry into the charity under section 6 of the Charities Act 1960. My request was refused.
Since the arrival of the new trustees in April this year, the charity has elected a new chairman, Mr. John Thomas. He replaced the previous chairman of several years, Miss Lucy Brown. Miss Brown has ably served the people of Bermondsey as a councillor, especially—I understand—in the 1920s. But at the age of 92, I would suggest she was not the most suitable choice to be chairman of a charity with an estimated million worth of assets, which were being stripped off by its clerk.
The new chairman, supported strongly by some of the former trustees, ordered an immediate inquiry into the sale of all property by the charity during the past five years, which produced some extremely interesting results. As well as owning St. Olave's mansions, the charity owned a large number of handsome Georgian houses along Kennington road and Walnut Tree walk in my constituency. The internal inquiry revealed that, in January 1985, 13 of those houses were sold to an Isle of Man registered company called Kindrid for a total of £52,000. Thus, 13 large, four-storey houses in Kennington were sold at an average price of £4,000 each. Incredibly, the Charity Commission approved that sale as the best deal possible for the charity—a point to which I shall return shortly.
This sale of the century was stongly urged by a so-called surveyor, Mr. Benjamin Gurvitz of Benjamin Glen and Company, Godalming, Surrey. Mr. Gurvitz was also strongly urging the charity to sell its property in Fairlawn park to Silvercount Ltd. Mr. Gurvitz is not a qualified surveyor. He was appointed by Mr. Pollock without any reference to the trustees, and in 1984 he received £31,000—three times what the beneficiaries of the charity received that year—for his services to the charity. His reports on the condition of the property in Kennington road and Walnut Tree walk were completely fallacious. He referred to derelict property, when in fact most of the houses were tenanted and in the last two years had more than £70,000 spent on them, including new roofs. An independent assessment by a local estate agent reckoned that each house was worth at least £40,000–10 times what the charity sold them for, with the approval of the Charity Commission.
Kindrid Property, a faceless corporation registered in the Isle of Man, immediately resold two of its newly acquired properties to Apton Properties in January 1985. The directors of Apton Properties Ltd. are names which will be familiar to us—Mr. Barry Rosoman and Mr. Brian Glen. Just one of those properties is now back on sale for more than £110,000.
Apart from these sales to Kindred and Apton, other property owned by the charity was being acquired at knockdown prices—all with the approval of the Charity Commission. No. 126 Kennington road, a large five-storey house, was bought by a Mrs. Robinson for less than £17,000 in late 1984. No such person existed. The house was actually bought by Mr. Brian Clifford, a well-known criminal who was killed in Kennington in a gangland murder on 28 September. The police are currently investigating the connection between Mr. Clifford and the activities of the St. Olave charity. In all, it is estimated that the St. Olave charity has lost well in excess of £1 million in fraudulent property deals in 1984–85 alone; or, more precisely, the poor and elderly of Bermondsey and Kennington have lost more than £1 million.
The internal inquiry, following the appointment of Southwark council's new trustees, into the operations of the St. Olave charity included a report produced by its auditors Ball, Baker and Leake. It became apparent that Mr. Pollock had complete and total control over the charity. He authorised payments to the beneficiaries of the charity, he allocated empty property, and he authorised payment of all invoices, including those to Flowerbrook, the building company of which he was a director. None of this was referred to the trustees, and with respect to the allocation of empty properties, it is clear that he broke the

allocation policy of the charity and simply favoured his friends and acquaintances. He even employed his father-in-law and a previous clerk to the charity as a consultant.
On further investigation it soon became apparent that there was a close and direct connection between Kindrid Property Company and Mr. Pollock. The Isle of Man is not renowned for the level of company information available to the public, but it was clear that Kindred was a shell company aimed to disguise ownership. More investigations revealed that the two signatories to the company's bank account were Mr. Barry Rosomon and Mr. Phillip Pollock. At this stage, the new trustees called in the fraud squad and Mr. Pollock was sacked as clerk in September 1985. Further proceedings now depend on the progress of fraud squad investigations.
The scandal surrounding, the affairs of the St. Olave charity is an example of appalling personal greed and misconduct. It is also an indictment of, at best, complacency and, at worst, misconduct within the Charity Commission. That St. Olave's mansions and Fairlawn park did not follow the rest of the property of the charity into dubious ownership is entirely due to the efforts and hard work of the tenants, combined with members of the local community and Labour party, and assisted by the publicity given in The Mirror and in the South London Press.
Even now, many of those in the Charity Commission refuse to accept that they acted wrongly in allowing the charity to dispose of its assets—after I had made representations to and had meetings with Mr. Peach—on the basis of inaccurate statements from an unqualified surveyor. I accept that, under this Administration, the Charity Commission may lack the means fully to monitor the activities of charities. However, the suspicion surrounding St. Olave was first brought to its attention in February 1985 and it has consistently refused to investigate it throughout the year.
What is even more alarming is that the case of St. Olave is not the first of a major London charity being involved in fraudulent property deals. In the case of the Hampstead, Wells and Camden Trust, a charity well known to some members of the House, the trust's agent, Ronald O'Dell, disposed of 24 prime Hampstead properties for an average of £54,000 between 1979 and 1983. He was gaoled for fraud at the Old Bailey in February this year, for four months, with 11 months suspended.
There are three key questions now to be asked on the operation of key officials in the Charity Commission, and professional advisers in the asset stripping of the St. Olave charity. First, there is the role of the charity's solicitor, a Mr. Boodle, of George Carter and Co. It was Mr. Boodle who gave the advice to the charity to block the appointment of the new trustees nominated by Southwark in December 1984. It was Mr. Boodle again who, at the crucial meeting in November last year, approved the sale of the properties in Walnut Tree walk for £4,000 each, when any responsible solicitor would have challenged such a sale in such a location at such a price.
Again, it was Mr. Boodle who failed to take appropriate action to stop the sale of 126 Kennington road to the now deceased Mr. Clifford, who had applied to purchase it under a false name, following an evaluation by the unqualified surveyor, Mr. Gurvitz. Moreover, the same Mr. Boodle is failing to co-operate fully with the independent inquiry into the sale of properties by the St. Olave charity instigated by Southwark council. In my


view, had the Charity Commissioner, Mr. Peach, been adequate for his job, Mr. Boodle's activities should already have been the subject of an inquiry by the commissioners themselves.
Secondly, there is the role of the accountants to the St. Olave charity, Ball, Baker and Leake. They produced a report on 29 August 1985, indicating clear evidence of maladministration and admitting that they were unable to confirm that they
have reviewed all relevant documentation, since the adequacy of the filing of information is insufficient to enable us to conclude with full confidence in this matter.
Yet despite this, Ball Baker and Leake made no recommendation concerning action to remedy the inadequacy of the information, and ended by thanking the clerk to the charity—the now sacked Mr. Pollock—for his co-operation.
Thirdly, and most important, there is the role of the Charity Commission in the approval of sales below market value to and through those who have been asset-stripping the St. Olave charity. The key here is the meeting that took place in the Charity Commission in November last year between Mr. Pollock and Mr. Rosomon and a member of staff of the Charity Commission. At this meeting, approval was given for the sale of properties belonging to St. Olave on the Fairlawn park estate in Sydenham at £11,000 each when the tenants of those properties were prepared to offer £17,000.
This situation demands answers to three questions. First, why was the sale approved at a price so clearly below value, and below what the tenants were prepared to pay? Secondly, why was there a change of policy by the Charity Commission or by someone in it within the half hour in which this meeting took place, granted that for months the commission had refused to agree to the sale? Thirdly, who in the Charity Commission approved such a sale during that meeting in November? Was it Mr. McManus, who also appears to have been involved in the approval of the sale of properties by Mr. O'Dell of the Hampstead, Wells and Camden Trust, which led to Mr. O'Dell being arraigned before the High Court and pleading guilty to fraud? If so, on what grounds did Mr. McManus come to such a change of mind so quickly on the matter of the sale? Was he offered and did he accept payment for such a change of mind?
It is clear that the matter must now be investigated at the highest level, since all the important prima facie evidence shows that corruption involving the asset-stripping of properties is not simply a matter of the abuse of a small charity such as St. Olave or the Hampstead, Wells and Camden Trust, but appears to extend into the Charity Commission itself. Let us by all means find that this is not the case and that individuals such as Mr. McManus can clear their names. Let it be a judicial inquiry instigated at the highest level, by the Home Office or the Solicitor-General rather than by the Charity Commission whose commissioner has proved utterly inadequate in his response to the grave charges brought now for nearly a year concerning the activities of St. Olave, just as it was for a longer period to the charges of corruption in the case of the Hampstead, Wells and Camden Trust.
Not least, let us, in such a judicial inquiry, have the full co-operation of hon. Members who have been associated with such charities, including the hon. Member for

Hampstead and Highgate (Sir G. Finsberg). He is, and for some years has been, a trustee of the Hampstead, Wells and Camden Trust, while Lady Pamela Finsberg was, until allegations of criminal activity were made, chair of the estates committee of that trust during the time of the offences for which the managing agent—Mr. O'Dell—of the trust was subsequently gaoled. I alerted the hon. Member for Hampstead and Highgate that I would seek to raise the matter of this trust. I am sorry that he is not in the Chamber. Granted the hon. Gentleman's experience, and the direct parallels between the offences that have occurred in both St. Olave and the Hampstead, Wells and Camden Trust charities, the hon. Gentleman is admirably placed to be able to co-operate with and aid the public interest in giving evidence to such a judicial inquiry.
In particular, in relation to both trusts, the following questions should be investigated, and their results made public. First, when was the attention of the trustees first brought to the fraudulent sales? Secondly, why did the trustees wait for several months in both cases before seeking advice from the Charity Commission? Thirdly, why did the trust not bring the matters concerned to the attention of police at an earlier date? Fourthly, what business dealings has any member or trustee of either trust had with any property company, estate agent or developer and what has been the nature of those dealings, with what remuneration, at what times and on what terms? The Register of Members' Interests is quite inadequate in this respect. Whose fingers were in the till? Were they those of Mr. Pollock and Mr. O'Dell alone? Or was Mr. O'Dell, who has been given a sentence of only four months, the volunteer fallguy for bigger names to escape the courts?
Why did Mr. O'Dell get off with so light a sentence and the obligation to repay only £65,000 to the beneficiaries of the trust, having sold 24 prime properties in Hampstead, when this represented only a fraction of the value of the properties that he had sold to his advantage? Is the House to tolerate a situation in which, with millions of pounds of such asset-stripping, it may pay some individuals to go to jail for four months and then retire abroad on gains made—but unreclaimed—through tax havens, for the rest of their natural lives? Is this to be tolerated by the Charity Commission or the Government in the case of the St. Olave charity and its operations in my constituency?
The present procedure operated by the Charity Commission in regard to the sale of charitable land and property has shown itself open to gross manipulation and abuse. But in 1984 the Charity Commission gave nearly 2,000 orders authorising charity trustees to sell property. Given what has happened in these two individual charities in London, how can the public, the Government and the House be confident that other such sales among small charities are not similarly subject to peculation and fraud?
There is one final and outrageous twist to the role of the Charity Commission in the whole sorry saga of the St. Olave case. The new trustees, recognising the legitimate fears of the tenants of St. Olave's mansions, have agreed that the property should be acquired only by a socially responsible landlord, such as a housing association. They have now entered into negotiations with the London and Quadrant Housing Trust for the sale of St. Olave's mansions at a fair and independent price as determined by the district valuer. However, the Charity Commission has now intervened and insisted that the new trustees must sell to a property company at the highest possible price regardless of the future of the tenants. Having allowed


most of the charity's property to be ripped off for a song, the Charity Commission's only action over all these months has been to prevent the new trustees from protecting the interests of its tenants and gaining a fair and independently assessed price for the sale of its assets to a housing trust.
The support and monitoring available to protect the beneficiaries of small charities need to be increased. If the Charity Commission is not up to the job, local authorities could and should be involved in the arrangement. Many trustees of charities are well-intentioned volunteers who are unaware of the full extent of their powers and responsibilities. They need support and training to ensure that their charities are properly administered. On the specific point of disposal of property and land, the present arrangements are patently quite inadequate. The whole concept of sale to the highest bidder, particularly in relation to tenanted property, forces charities into the uncharitable hands of property speculators and worse. The recent experience of the Church Commissioners with the sale of their tenanted property in Maida Vale is but one example of this.
Charities should be encouraged to dispose of their properties to other socially responsible landlords rather than to property speculators whose main interest is to secure vacant possession of property and make a quick profit. This could be achieved if charities were allowed to sell their properties at an independently assessed price determined by the district valuer, rather than open-market valuations which preclude all but property speculators from purchasing. That principle has been accepted by the Government in regard to council houses and it should surely apply to the sale of any property owned by charities.
The Charities Bill, which is awaiting Royal Assent, does not, unfortunately, address itself to these problems, as it is primarily concerned with charities having an annual income of £200 or less. St. Olave had an annual income in excess of £160,000, very little of which actually went to help its original beneficiaries.
The judicial inquiry for which I have called should produce recommendations for effective monitoring, support for trustees and guidelines for the disposal of land and property which should be incorporated into the amendments of the Charities Act 1960.

Mr. William Powell: Like other hon. Members who have spoken, I seek to urge on my right hon. Friend the Leader of the House that our Adjournment be delayed, if only by a short time. Having heard the speeches in the debate, it is my earnest hope that we shall seek to adjourn the House more frequently than we do because we have had the opportunity to listen to a number of important speeches. One of the great advantages of a debate such as this over an ordinary Adjournment debate is that many hon. Members are present to hear what is said and all of those present in the Chamber for the debate have been educated and moved by what they have heard.
I have not the slightest doubt that the right hon. Member for Swansea, East (Mr. Williams) will take advantage of the opportunity that he will have to comment critically upon the conduct which has taken place in Lewisham and which has led my hon. Friend the Member for Lewisham, East (Mr. Moynihan) to make his allegations. Equally, the hon. Member for Vauxhall (Mr.

Holland) has brought before the House a series of matters of the utmost importance which it is entirely right that the House should debate.
As I am rather an old-fashioned kind of person, when the hon. Member for Vauxhall asked for a judicial inquiry, my mind turned to the device that was used very effectively by the House in days of old, which was to set up a Select Committee to investigate particular abuses and to make recommendations to the House. However, the hon. Member for Vauxhall is not the first person to make such allegations against the conduct of the Charity Commissioners, though it is exactly the kind of matter which, it seems to me, should properly be investigated by the House.
I want to refer to the speech of the hon. Member for Knowsley, North (Mr. Kilroy-Silk) who, as always, spoke very movingly about the plight of the unemployed in his constituency and the horrendous problems with which he is faced in representing a constituency where 10,000 people are out of work and where there appears to be no prospect of work for them. I take advantage of this opportunity because, as a Conservative Member of Parliament, I have some qualifications for speaking on the subject of unemployment.
When I was elected a Member of Parliament two and a half years ago, I was the Conservative Member of Parliament with the highest level of unemployment in his constituency. At that time about 7,000 to 7,500 people were unemployed. That is a horrendous enough figure, but it is not as high as the unemployment in the constituency of the hon. Member for Knowsley, North. But he is not alone. Many Opposition Members represent constituencies where there is five-figure unemployment. There are no constituencies represented by Conservative Members of Parliament, thank goodness, with five-figure unemployment. We should not turn a deaf ear to the pleas that are made, even if the solutions that are brought forward, during the period of either the present Administration or a changed Administration, make only limited progress towards dealing with the problem.
I am blessed further because, although the hon. Member for Knowsley, North sees unemployment in his constituency rising inexorably and quite hopelessly—I accept his analysis—fortunately, unemployment in my constituency has fallen further and faster since the general election in June 1983 than in any other constituency in the country. I was representing just over 7,000 unemployed persons in 1983, but that figure has now dropped to under 5,500. Furthermore, I can Look forward to a continuing and substantial reduction in unemployment. It is therefore a racing certainty, if ever there was one, that by the next general election unemployment in my constituency will have been cut by, at the very least, more than half.
Let me reflect for a moment upon why that should be so. There are two aspects to it, neither of which should be overlooked by right hon. and hon. Members. First, a responsibility lies upon the Treasury Bench. My criticism of the analysis put forward by the hon. Member for Knowsley, North—I regret that he is not in the Chamber—is that he concentrates too much upon a public sector solution to his problems. My contention is that the public sector has an important role to play. There is no running away from that fact. I want that fact to be understood by my hon. Friends, the Opposition and the alliance. Let us not forget that overwhelmingly, except in two cases, the alliance represents constituencies where


there is extremely low unemployment. The two exceptions are the inner city constituencies of Southwark and Bermondsey and Liverpool, Mossley Hill.
The public sector has a very important pump-priming role to play, but on the back of that pump-priming role the private sector must come in. That is exactly what has happened to a huge extent in my constituency.

Mr. D. N. Campbell-Savours: That would be the policy of a Labour Government.

Mr. Powell: The hon. Member for Workington (Mr. Campbell-Savours) is always helpful. He says that that would be the policy of a Labour Government. I accept that that is their ambition, but another factor has to be considered. Not all the hon. Gentleman's friends are as assiduous about this point as they ought to be in the interests of their constituents. If the private sector is to come in on the back of public sector pump priming, it is vital that the reputation of the communities where that is to happen should be as sky high as it can possibly be. If private sector finance is to be attracted, it is vital that the private sector companies that one seeks to attract to one's community should be encouraged to come in because of the good reputation of that place.
An unfortunate fact of life—although it may not be welcomed by all right hon. and hon. Members if I spell it out as clearly as this—is that not all areas of this country enjoy a high reputation not only in the rest of this country but in the rest of the world. When there is competition for private sector investment, it is always a handicap when the private sector says that it does not like the reputation of a particular place. I stress that it may be a false reputation, but it is the duty of local communities, if people have a false and misconceived view of their community, to do everything that they possibly can to dispel it. That message is not coming through as loudly and as clearly as it ought to do from some of the places where unemployment is very high. I make that point not as a general, sweeping criticism but as a fact of life. It is well known in the rest of this country. It is also well known to international investors.
Let us not forget that all the time we are travelling through time. I was born and brought up in rural Suffolk. Today it is a boom area, but 100 years ago it was not. The villages of rural Suffolk were then being depopulated. The best of the local population frequently went to the large towns, among which were Merseyside, Manchester and London, to find prosperity and work. Many of them, though not all, found exactly that. The reason that they went in particular to Liverpool, Bristol and Glasgow was that those port cities were geographically in the correct place at that time in history for the role that they had to play. The ports of Liverpool, Glasgow and Bristol were servicing our empire. Therein lay their prosperity.
Today the role of history has changed the geographical axis of this country. We are living in an age in which increasingly the bulk of our trade is exported through our eastern ports to Europe. It is not exported westwards, via the Atlantic ocean, to the empire. Our trade goes to the European Community and to other European countries. That is simply a fact of life in the age in which we live. There is not the slightest doubt in my mind that every

community on the western side of this country is geographically at a disadvantage compared with every community on the eastern side.
The public sector undoubtedly has an important role to play. It has to do what it can to compensate for this very substantial geographical handicap. Nobody would be more pleased than I, except possibly the hon. Member for Workington, if unemployment in his constituency, on the western side of this country, were to be reduced to zero. However, because of the location of his constituency, he faces a very considerable handicap compared with mine where unemployment is falling substantially. It is on the eastern side of the country. It is two hours from the port of Felixstowe to which so much of its trade comes and from which so much of its trade is exported.
We have to face up to the many unfortunate, unpleasant and debilitating facts of life about the unemployed. I was grateful to the hon. Member for Knowsley, North for his contribution. However, we do not say enough about one other aspect of unemployment. I admit that unemployment in my constituency was high at the time of the last election. It is still very high, although it is falling.
One feature of the unemployment statistics in my constituency stands out. It is that the bulk of unemployed people there are middle aged. Middle age begins at a depressingly young age. At 30 years of age people are told that they will never work again. People aged 16, 17 or 18 have no difficulty in finding work, but at 30 finding work is difficult and it is even more difficult for the 35 and 40-year-olds. They are the forgotten unemployed. Yet the effect on people of that age is greatest because they usually have children.
A person of 30 is likely to have a young family. It is almost certain that the wife will be unable to work because of the responsibilities and demands of young children. The tax and social security systems act as a massive disincentive to work and that creates the grinding, deplorable, debilitating problem of family poverty.
I urge the Minister to counsel his colleagues on the Treasury Bench and in the Cabinet to do everything that they can, beyond the call of duty, to ease the effects of our social security and tax systems on young families when the husband is out of work and considered too old, the wife is unable to work and young children are growing up and imposing huge demands. The social security system does not provide sufficient for such families. The tax system bites too heavily and too low on the scale so that the disincentive to work is considerable. It is important to ensure that the thresholds are raised so that there is no disincentive to work if and when such people find work.

Mr. D. E. Thomas: The hon. Member for Corby (Mr. Powell) spoke about the difficulties in the western part of Britain. I want to refer to the difficulties facing one of the traditional industries in my constituency. It is an industry which you, Mr. Deputy Speaker, know well and to which you made a significant contribution when you were a Minister. You are perhaps the Minister who has made the most significant contribution to that industry because you introduced the pneumoconiosis compensation scheme which has benefited many slate workers and their families.
I want to highlight publicly the long dispute in three slate quarries in my constituency in the town of Blaenau Ffestiniog. The House cannot take much action in the


dispute, but it is incumbent on me to exert as much influence and moral pressure as I can on the directors of the companies concerned so that a negotiated settlement is reached. To that end, I placed on the Order Paper this week an early-day motion which seeks to put pressure on the companies to refer the long-standing dispute to the Advisory, Conciliation and Arbitration Service.
I do not want to take advantage of my privileged position to go into detail about the causes of the dispute; that is not my role. I want to stress that this has been a long-running dispute for four months. It began during the summer recess.
The dispute is over a bonus payment scheme. The workers have been working to rule and some have been dismissed. The directors of the companies involved have not been prepared to refer this official dispute to conciliation. I pay tribute to the attempts that have been made by individuals, by the town council, by the official shadow spokesman for Wales who has visited the area, and by ACAS officials who have sought informally to persuade the managements to agree to further negotiations.
Unfortunately, at least one of the directors is not prepared to communicate with me. That director has not answered a succession of letters that I have sent to him. He is not prepared to meet me to discuss the issue. He is not willing to meet the regional secretary for Wales of the Transport and General Workers Union, Mr. George Wright. It is clear that the dispute will continue well beyond Christmas unless the managements of the companies are prepared to negotiate.
The dispute is dividing a community. It is creating bitterness. That seems to be part of the legacy of the slate industry's industrial relations. We have experienced long lockouts before. We experienced long disputes, known in Wales as streic fawr, in the slate industry at the turn of the century. I regret that small local companies, owned by local Welsh people, are behaving in a way which is reminiscent of the behaviour of the landlords and quarry owners of a bygone era.
I want not to recriminate but to stress that employers in a small community have a social obligation. One of those obligations is a willingness always to communicate with the work force. They must be willing to negotiate with the official spokespersons of the work force. I pay tribute to the way in which the lodge and the trade union official responsible for the area, Mr. Tom Jones, have conducted themselves during the dispute.
Picketing has not occurred as it did in another dispute in the mining industry. The conduct of those concerned has been restrained. Throughout the dispute the community has supported the workers, and support has come from beyond Wales. The quarry workers face a Christmas on a reduced income and are much concerned about their jobs. I am worried that the quarry owners will seek to recruit other workers and will not reinstate those dismissed during the dispute.
I hope that the companies will take heed of my request that they meet ACAS officials so that a peaceful solution to the dispute can be found. I urge other hon. Members, either in this debate or by other means, to join me in exerting pressure on the companies so that good industrial relations can be restored to the slate industry.
When personal relationships break down, the emphasis is on the need for conciliation, or even compulsory conciliation. Perhaps we should re-examine our industrial relations legislation and find ways to make conciliation

procedures compulsory when relations break down. I hope that as a result of the publicity that the issue has attracted throughout Britain the companies will respond to our request for negotiations.

Mr. Christopher Murphy: Before the House rises for the Christmas recess it should consider afresh three aspects of reforming zeal affecting local, national and international policies, all of which are of interest to my constituents.
The first aspect is rating reform and its special local significance. Having for long advocated the abolition of domestic rates, I welcome the renewed Government commitment to action—better late than never, as may have been feared at one time. Although I favour a system based on a poll tax, I recognise that many gaily bedecked and bewitching paths may lead to the ultimate Christmas box desired by many, but let us venture at last along one of these tinselled ways.
The current system adds additional problems to the evident and inbuilt one of unfairness. The rate support grant formula inadequately reflects the needs of shire counties such as Hertfordshire, as I have drawn to the attention of the House in the past. I will only say, to avoid rehearsing my lines again, that this pantomime must be taken off and restaged, for as it currently performs—bearing in mind also the requirements of districts such as Welwyn Hatfield—it fails to persuade me to vote for such settlements.
Indeed, in consequence of today's announcement, regarding the district council, it is literally a case of "thanks for nothing," and, from the point of view of the county council, "thanks for very little", as the rate support grant has been significantly reduced despite adherence to Government guidelines.
I continue with shop hour reform, which is of national importance. I have never opposed a voluntary approach to Sunday trading, but have always opposed any compulsory element. A previous attempt via a private Member's Bill to overcome the present anomalous situation was something that I could support, but now we are faced with a Government measure which goes far further, in that people's employment is also being tackled in a way that creates potential new anomalies, which I could not support.
It must be appropriate, as we approach the eve of Christmas, to consider such matters from a Christian and committed viewpoint. I urge the Government to reconsider the matter and to agree that to sell the Bible on Sunday is no crime, but that nobody should have to work against his or her conscience on that day.
I conclude with Northern Ireland constitutional reform and its international dimension. The Anglo-Irish agreement is in danger of becoming a donkey from two thoroughbred stables—I am keeping to the Christmas theme—and I fear that no amount of coaxing will achieve the necessary movement. All men of goodwill must want the Nationalist as well as the Unionist view to be represented, but that should not be by proxy via the Dublin Government with no democratic mandate. Rather, it should be by way of full and fair local government, and that is sadly lacking in the Province.
I wish to see an end to the bloodshed, and that is why I favour the closest possible co-operation with the Republic to defeat terrorism from whatever source. Such


co-operation should be freely given, without any need to accept an erosion of the sovereignty of the United Kingdom or a weakening of the commitment of remaining British while the majority wish it—hence my opposition to the accord.
To satisfy the angelic choirs that he has heard this evening, my right hon. Friend the Leader of the House will need all the sagacity of the three wise men. I wish him well.

Mr. Jim Craigen: In some quarters this is regarded as the hypocrites' debate. I hasten to assure the Leader of the House that I want my Christmas break and I am taking the opportunity of the debate to raise a constituency matter, though it has considerable health implications for Glasgow and the west of Scotland.
It concerns the proposed closure of the infectious diseases ward, No. 12, at Ruchill hospital in Glasgow. This proposal by the Greater Glasgow health board arises out of the serious financial situation facing the board, both in the current year 1985–86 and in 1986–87. I am optimistic enough to believe that the Leader of the House, being a man of some influence in the Cabinet, will have a word in the ear of his colleague who is responsible for health in Scotland, because I am anxious to see some Government follow-up to the points that I am raising about the recommended closure of the ward.
It is an 18-bed adult ward and it is estimated that £300,000 would be saved by its closure. The implication, however, is that 25 per cent. of all the adult cubicles in the infectious diseases unit, or two fifths of the support beds that are currently available, would be lost.
I need hardly remind the Leader of the House that Glasgow recently experienced some disturbing cases of legionnaire's disease and that there has been an increase in the number of hepatitis cases. The new Minister for Health has been making it clear that the Government are keen to do more to assist the prevention of AIDS. In these days of greater international travel, the incidence of tropical diseases is also on the increase.
I am raising this issue because the main areas of work done at Ruchill merit close examination by the Scottish Office. Legionnaire's disease has become far more common. Indeed, it is now one of the more common causes of pneumonia, and a number of recent cases admitted to Ruchill have been of legionnaire's disease.
The incidence of AIDS is causing that disease to have a higher political profile. We cannot underestimate the interrelationship between AIDS and the growing problem of drug abuse. I shall not bore the House with the figures, but I gather from them that many youngsters are becoming involved in this horrendous area because of the effects of drug abuse.
About 8 per cent. of cases admitted to the unit at Ruchill arise from tropical diseases and fevers, and the World Health Organisation recently pointed to the growing number of new viruses which the medical profession is having to combat.
The Ruchill unit deals with a broad range of referrals. In this area of health, all admissions are, by their nature, emergency admissions; one cannot have an appointments system when coping with infectious diseases. Some patients are admitted and found subsequently not to have

infectious and communicable diseases, but 93 per cent. of cases are confirmed, so facilities must be available for early investigation and medical treatment.
In 1980 the Belvedere hospital unit in Glasgow closed and its infectious diseases facilities were integrated and concentrated at Ruchill, which now has a wide reputation in Scotland for the work that it does. We have two paediatric wards. Originally we had four adult wards, but one was closed, and now the Greater Glasgow health board is proposing that ward 12 should close in order to save £300,000 because of the board's terrible financial position, which has arisen from the mean-mindedness of the Scottish Office in not realistically appraising the health needs within the Greater Glasgow area.
An audit on bed utilisation recently showed that if ward 12 were to close, on one day in three no isolation cubicles would be available for any cases that may occur. I need hardly tell the Leader of the House that the attendant risks to the community at large do not bear examination. What seems to be an economy may prove to be an expensive cut in public expenditure. All too often trying to save a penny or two here leads to spending a pound or two somewhere else because of the consequential effects.
I hope that the Leader of the House will use his good offices to impress on the Scottish Office the need to examine the position at Ruchill in relation to some of the wider problems that arise from infectious diseases, not only in Glasgow, but in the west of Scotland, which the unit presently serves.

Mr. David Amess: Before the House adjourns for what I trust will be an enjoyable Christmas recess for us all, we should consider the future of hospital radio broadcasting and certain anxieties about community radio. I have the privilege to speak in this place—I hasten to add, in an unpaid capacity—for the National Association of Hospital Broadcasting Organisations. Those unsung heroes and heroines are unique in that they are all unpaid, yet it is an extremely large charity. I should particularly like to take this opportunity to pay tribute to all the hard work of the executive committee.
I should say at the outset that my career as a hospital radio broadcaster has been extremely short. Some years ago I volunteered my services to Radio St. Andrews in Bow which used to operate in a cupboard underneath the stairs. After just three weeks the lady in charge of the station diplomatically told me that my services were no longer required. She implied that I did not have quite the sort of voice that they were looking for. Some other far less diplomatic person told me that I was just not cut out to be a disc jockey and that my voice was not altogether conducive to the recovery of patients. However, I did not take offence and I do not apologise to the House for having to suffer me at the moment.
The importance of hospital radio cannot be over-stressed. There is an argument, backed by respected members of the psychiatric profession, that the therapeutic value of hospital radio contributes to the speeding of patients' recovery. People often come into hospital lonely and afraid. With the best will in the world, one's family, where there is a family, is not in a position to appreciate the problems. No one can be there all the time. The mental pain can be more traumatic than the physical pain which put the patient into hospital in the first place.
Hospital radio supplies a friendly voice, somebody who is of the local community and yet with the patient, somebody aware of the difficulties of that specific hospital. Indeed, the patient is likely to meet the radio voice as the person travels round the wards. That friendly voice takes the mind off the loneliness and pain, and that can only contribute to a successful discharge from hospital. As Seneca said over 2,000 years ago, the desire to be healed has always been part of health. Hospital radio assists in that desire to be healed by keeping a person in touch with the immediate outside world and away from the pain he experiences.
Practically all hon. Members will have some form of radio in hospitals in their constituencies. There are about 300 hospital broadcasting organisations which provide a service, in addition to that of relayed BBC and IBA stations, to their audience of over 217,000 patients. All hon. Members will have some of the 10,000 volunteers working in hospitals in their constituencies. We have 70 such people in Basildon, and I am delighted to say that a few weeks ago I opened the first television network in a hospital in my constituency.
I want the House to consider a fair charter for hospital radio. We are not asking for grants or funds, and we wish to retain our independence. Fund raising goes on through the year in order to keep items such as equipment up to date. However, hospital broadcasting organisations still meet opposition from within administrations. Each organisation is dependent for its existence on the attitude prevailing in each individual hospital. Many administrators are helpful and co-operative, but there are still some who are obstructive and unhelpful. One organisation was kept out of a hospital by a senior nursing officer who felt that the project was not worth while. Another had to argue for eight years to have the facility afforded to it.
Most stations can operate within a single room, 10 ft by 10 ft—the size of many hon. Members' offices. Many hospital radios interconnect with small hospitals in the same area. For some years they relied on telephone landlines whose price remained stable. Eventually, British Telecom had to bring prices into line with other charges to prevent large losses. BT co-operated to the fullest extent with NAHBO in trying to cost the alternative of using the private landlines of the hospital system. It was estimated that the use of such lines could produce savings of up to 80 per cent. Unfortunately, the Department of Health and Social Security wrote to NAHBO and put the entire burden back on to individual administrators, from which the organisation sought to remove the difficulty.
My right hon. Friend the Home Secretary is considering the implementation of community radio. I know that he has received my representations and those of the society on that subject. All the arguments that I have researched on the use of internal hospital radio apply with more vigour to the use of a low-powered radio frequency transmitter. Broadcasting to several hospitals would be enormously simplified. Initially, there would be no need to use the internal telecommunications system of the hospital network. Nor would there be any need to spend recurring amounts on British Telecom landlines. The transmitter would be relatively expensive but would probably pay for itself in a few years. It would also be non-recurrent capital expenditure, towards which fund-raising could be directed.
As headsets take such a low priority nowadays, many patients are encouraged to bring their own headsets and

transistor radios with them into hospital. That tends to lead to them becoming out of touch with the local community and to miss the personal service of hospital radio. A transmitter, even on a time-sharing basis, would put patients back in touch. As most organisations intend running some kind of two-way family favourites programme, the implementation of community radio would result in a much closer, more supportive relationship between the patient and his family—the kind of relationship which sustains and encourages the fight against illness and for which the DHSS laid down guidelines when referring to children. Adults become as lonely and afraid as children, especially when faced with the unknown. The provision of low-power transmitters would undoubtedly assist in the crucial area of patient recovery.
In all those problems there can be seen one common denominator. My right hon. Friend the Secretary of State for Social Services does not issue guidelines to district health authorities on their attitude towards hospital radio. Indeed, the message from the Department is that the matter is for the individual hospital administrator. The association agrees that decision-making should be left to individual administrators. It is in favour of local autonomy. Nevertheless, it looks to the Department to provide some kind of leadership.
I urge my right hon. Friend to look again at the difficulties facing hospital radio; at the marvellous efforts of so many voluntary workers; and at the worth of their contribution to the healing process. He will find the case for guidelines overwhelming, and I ask him to issue a circular placing hospital radio in context for the busy administrators of hospitals in Britain today. Let us never again take hospital radio for granted, but give it the support and encouragement that it fully deserves.

Mr. Harry Cohen: Before we adjourn for Christmas we should have a proper debate on Britain's nuclear policy and the need for nuclear disarmament.
Yesterday I visited Greenham Common and met the brave women in the peace camps. They endure much in the protest against cruise missiles and against nuclear annihilation of Britain that the use of such missiles would mean. Theirs is a peaceful protest. They totally renounce violence to the police or to anyone else on the base, but the converse is not the case. Yesterday an elderly woman, Sarah Hipperson, was savagely thrown into a 12 ft ditch by the police because she was standing in front of a tree in which another woman was perched. Miss Hipperson suffered severe injuries and shock, but it could have been worse. There is a continuous history of such violence against the women and it has been increasing. I am told that in August Ms. Ann Harrower was knocked down by a United States road patrol vehicle which deliberately swerved to hit her—a clear case of reckless and attempted deadly dangerous driving. I believe that the vehicle had a Royal Air Force police escort who just left Ms. Harrower lying in the road. If thuggish behaviour of that kind by police and military authorities is allowed to continue unabated, one of those peaceful women protesters will die. If that happens, the Government will be responsible.
The principal purpose of my speech, however, is not to prevent deaths of that kind, although that is clearly vital, but to prevent the millions of deaths to which Britain's


current nuclear policy is leading. The House, to its shame, provides scant opportunity to argue the matter. I intend today to show that Britain's nuclear policy is morally and militarily indefensible.
Of course Britain must defend itself. That is a straightforward moral and military stance which I accept, but our defence should be non-nuclear. Britain's long and unique history has always hinged on our ability to defend this sceptred isle. The history of the 20th century has brought home forcefully the moral and military imperative of protecting the people and boundaries of our nation from attack. Of course it was right to take up arms against Fascism in the second world war. Since then, however, there has been an immense break with our previous historic notions of defence—the development, proliferation and sale of nuclear armaments.
The scale of the current nuclear arsenal is monstrous compared with any previous arms accumulation. All the bombs dropped in the second world war amounted to about 3 megatonnes. The present nuclear capacity in the world is 15,000 megatonnes and rising. Our defence policies are now not just militarily but morally indefensible. They are indefensible, first, because they fail in their intended purpose of defending our nation state. In other words, they are dishonest and immoral in their own terms.
One of the best-kept secrets from the British people is that nuclear weapons are first and foremost weapons of attack. They are offensive, not defensive. They have never been developed as weapons of defence and star wars is no exception, despite the Government's shameful support of that policy. They may splutter, like President Reagan, about defensive umbrellas, but, as I discovered in the United States recently, the Pentagon makes no secret of the fact that if the Russians attempted to put a similar umbrella over the United States it would be interpreted as an offensive act. Essentially, the strategic defence initiative is a massive first strike capability. Nuclear weapons will be used to strike first or to counter-attack. Either way, there is no defence.
What possible defence of our nation state is envisaged in which there will be few, if any, survivors? Protection, in human terms, does not dispense with the population in favour of strategic war games designed to ensure that space weapons and ballistic weapons long outlive us. Yet the Pentagon's massive research programme into what it calls "survivability" is devoted entirely to arms survival, not to human survival.
Will civil defence come to the rescue? What have the Government planned for us in that respect? The Conservatives have decided on their own open-market, individualistic approach. At the top of the social scale, the stockbroker bunker will provide cramped accommodation with a chemical toilet for two weeks before jettisoning its occupants into the nuclear winter. For do-it-yourself addicts, the Government advise urine-soaked sheets, upturned mattresses and plenty of white paint. For those caught outside, in the words of City Limits magazine, the advice is to
lay face down and kiss your arse goodbye.
That is a direct quotation, but the sensitive reader of Hansard may insert the word "backside"—same difference. That is hardly a serious protection strategy for the people of Britain.
When one looks more closely at the civil defence plans, it is clear that they are irrelevant to the real protection that the population will need in a nuclear war. Drastic powers are given to the armed forces. They are to control movement on main roads from our cities, preventing civilian evacuation and keeping the way clear for the police and the military. They are to cut off our phones, isolating families, relatives and friends. The plans provide for arrest and internment of anyone opposing moves towards nuclear war. Indeed, summary executions were part of the "Brave Defender" plans. The plans further provide for the takeover of stocks of food, petrol and drugs and the movement of Ministers, officials and military commanders to protected bunkers.
In short, the Government's civil defence plans are for our own armed forces to be used against our own people, the very people whom they are supposed to be defending. Such strategies are morally indefensible in purporting to meet the needs of people suffering the physical, medical and biological effects of a nuclear blast. The Government's message is clear: "Stay at home and die at home if you don't want to be shot in your own streets."
It is hard to see what protection there is for Britain in our current alliance with the United States. We have given away our national sovereignty by allowing American nuclear bases and weapons to be sited here. It is Reagan's finger that is on the trigger ready to fire cruise missiles. British military personnel are relegated to patrolling the perimeter fences and subjecting peaceful women protesters to the thuggish tactics that I have described. By amassing our own and an American nuclear arsenal on our soil, we have become a major strike target for an attack against which no defence can be mounted. This country has become the unwilling site of a European nuclear theatre so that the super-powers can keep the nuclear fight out of their own back yards. That is scarcely a list of morally edifying examples to give people faith in the protection offered by the United States.
Why do we not take the protection of our nation state seriously, and without delay get rid of all nuclear weapons? We should begin to build nuclear shelters on the Swiss model designed for all the population in the event of our not becoming direct targets, and we should become allies with those nations that are taking a moral lead against the nuclear madness.
Our nuclear arms system is an indefensible corruption and waste of human resources. In human terms, it is a depraved use of labour power. What can be more alienating than to work on a nuclear production line? What moral ideas of human dignity, creativity and self-worth are extinguished during such work when the unanswerable necessity of the wage packet drives out higher considerations of the genocidal consequences of this macabre production? What kind of morality places a higher priority on nuclear arms at the expense of the wilful neglect of useful production and research to meet human needs in Britain? There is ample evidence to show that our high levels of nuclear defence spending have played a significant part in Britain's economic decline.
But there is a practical, moral alternative called arms conversion, whereby resources misused on nuclear production could be redirected to civil markets to secure real jobs and to meet our obvious needs. That arms conversion programme should be massively expanded.
Furthermore, it is a scandal that more than 50 per cent. of Government-financed research is for military purposes.


This deprives research funding of projects that are attempting to solve a wide variety of real problems that face ordinary people. How contemptible is the Chancellor's cry that we cannot afford the welfare state when he rubber-stamps a 29 per cent. real increase in defence spending between 1979 and 1984.
The misuse of nuclear arms resources is at its most wicked when we count the cost of human suffering and misery in the Third world. No amount of Band Aid can stick over the shameful cracks in Government policy. With redirection, the scale of help towards global sufficiency would be remarkable. The cost of nuclear arms expenditure for two weeks would rid the world of infected water—a glorious prospect that is miles beyond the shabby vision of nuclear arms pedlars such as Reagan, Weinberger, the Prime Minister and the Conservative Front Bench.
The final thrust of my argument is to point to the global havoc caused by our needless rush to nuclear power. Communities throughout the world have unknowingly been exposed to the awful effects of nuclear testing and production. The extent of genetic damage, environmental pollution, radiation sickness and death following Britain's nuclear testing in Australia 30 years ago is only just emerging. The Government's response is to equivocate on their responsibility lest compensation proves costly and widespread.
Meanwhile, nuclear trains, with their deadly load, still trundle through many built-up areas every day, including my constituency of Leyton, and all that the Government can offer is public relations. That is their main plank of action. They rename areas to banish their radioactive connotation—for example, Windscale to Sellafield. Is anyone fooled or impressed? Is it any safer for children to play on those beaches? Is this the extent of the Government's moral responsibility to our land and people, including the military personnel engaged for our defence who are so casually subjected to radiation?
Even these shameful practices pale into insignificance when we consider the prospects unleashed for the entire world following a nuclear exchange. After deaths from burns, blasts and fall-out, the short-term aftermath would involve the collapse of food supplies, contamination of the water supply, the threat of fire, disease and pests, and the destruction of farm animals. The environmental devastation that that would entail would begin to upset the entire balance of the world's ecological structure, hurling us into a nuclear winter for generations to come. What a price to pay for moral disregard on this scale! We would have a world without hope, life and a future.
I urge the House to heed the words of Martin Luther King:
We must either learn to live together as brothers, or we are going to perish together as fools".

Mr. Peter Bruinvels: I must say immediately that I do not agree with a single word of what the hon. Member for Leyton (Mr. Cohen) has said. I believe very strongly in a nuclear deterrent.
There are three important matters that I should like to raise prior to the House going into recess. First, too many of our children are going missing each year, and I again make the plea for a central computer to record the details of the circumstances in which these children go missing.
Last year 20,000 children disappeared, although most were found. What my hon. Friend the Member for Gosport (Mr. Viggers) said was perfectly correct. At the end of last year 4,500 children had still not been found, and 45 had been abducted, including two from my own constituency. I therefore call on my right hon. Friend to introduce a central computer to ensure that all the circumstances surrounding these missing children can be properly recorded. I congratulate and compliment the National Children's Home on what it is trying to do with limited resources.
My second point concerns motorway lighting. There are only 376 miles of lighted motorway, leaving 1,100 miles unlighted. It would cost £9 million to light the rest of the M1, and £81 million to light the entire motorway system. The Select Committee on Transport called for all motorways to be lighted. It said that lighting motorways at night reduced accidents by 60 per cent. As a fatality at night costs £205,460, that seems a reasonable amount to spend. According to column 112 of the Official Report of 17 December 1985, which lists motorway fatalities by lighting conditions, on motorways unlighted, at night, there were 62 fatalities in 1982, 54 in 1983 and 61 in 1984, on motorways lighted, at night, there were 40 fatalities in 1982, 24 in 1983 and 33 in 1984; and in the daytime there were 104 fatalities in 1982, 109 in 1983 and 117 in 1984.
Lives could be saved. As my hon. Friend the Minister of State has confirmed, if a serious night-time problem develops on a particular length of road, lighting is automatically considered. That should be done. My hon. Friend stated that she was
keeping under review the need to provide additional lighting on the remaining unlit stretches of the M1."—[Official Report, 12 December 1984; Vol 69, c. 532.]
The Transport Select Committee stated:
We recommend the gradual installation of overhead lighting on existing motorways.
If there is a serious night accident problem which cannot be solved by other measures, lighting must be considered. That proposal has the support of the Royal Automobile Club, the Association of Chief Police Officers and the Royal Society for the Prevention of Accidents. The evidence shows that during the hours of darkness the accident rate is worse than during daylight. The time is right and the money is well worth spending. The Department of Transport has promised to provide a cost-benefit policy for allocating lighting on our motorways.
My third point concerns drinking and driving. Drinking and driving kills, yet the campaigns that the Department of Transport regularly puts forward never seem to get the message across. Last year's campaign at Christmas was "Stay low". It wrongly seemed to suggest that we should not drink too much before we drive. That campaign cost £880,000. My hon. Friend the Minister of State made it clear that she was against drinking and then driving. Unfortunately, the campaign's message did not get through completely. It is wrong to have a campaign only at Christmas. I ask everyone to be careful when drinking if he or she intends driving. I believe that the campaign should operate throughout the year.
As my hon. Friend the Minister of State said when launching her campaign on 9 December 1985, "Don't drink and drive." However, she went on to say, "If you think that you can drink and drive, think again." It is clear that that is not the right policy.
Alcohol affects the performance of any driver, so drivers should desist from drinking. This is one of the most serious road safety problems. With RoSPA making it clear that mixing drinking and driving causes 1,200 deaths a year—one fifth of all deaths on the road—it is clear that there should be no drinking and then driving.
The police have unrestricted powers to stop all motorists if they suspect that a driver has consumed alcohol. I urge them to do so, not just at Christmas, but throughout the year. I would prefer random breath tests, but the Transport Select Committee opposes them. I believe that random breath testing would be welcomed, because it would save lives. I should like an increase in the level of enforcement generally—north and south of the border—throughout the year. As drinking and driving is a problem throughout the year, the introduction of random breath testing would be a deterrent.
The numbers of deaths in drinking and driving accidents in which a driver was positively breath tested were as follows: 451 in 1982, 340 in 1983 and 338 in 1984. There is no doubt that fatal accidents are caused by excessive drinking. The numbers of people disqualified from driving because of offences involving driving after consuming alcohol or taking drugs were as follows: 64,000 in 1982, 86,000 in 1983 and 89,000 in 1984. I urge the House to give this policy the maximum support.
The policy will be effective. It will stop drivers taking the risk, especially at Christmas. We should take licences away immediately and not allow offenders to continue driving until their court appearance. That would have a deterrent effect. I want to see heavy fines imposed. The maximum should be at least £5,000, and not the present £2,000. If someone causes death by drinking and driving, he or she should go to prison for a minimum of 10 years. I want to see a Christmas clampdown on drinking and driving, and one that will continue throughout the year.

Dr. Norman A. Godman: The House should not adjourn until we discuss some elements of the Government's defence procurement policy. The elements with which I am concerned are of deep concern to my constituency. I refer to the placement of orders for conventional diesel electric submarines.
Last Thursday, I asked the Leader of the House whether he would ask the Secretary of State for Defence to make a statement in the next few days on the placement of these orders. The Leader of the House replied:
I shall certainly convey that request."—[Official Report, 12 December 1985; Vol. 88, c. 1073.]
I should like to know whether the right hon. Gentleman conveyed my request to his right hon. Friend and, if so, the answer that he received.
In a letter of 28 November, the Prime Minister wrote:
I understand that the competing tenders are still being assessed, but that Michael Heseltine intends to make an announcement on the placing of the order later this month.
I presume the right hon. Lady meant in December, before the House adjourned. A great deal of press speculation surrounds what appears to be a long-delayed decision.
I accept that I should not believe everything that I read in the newspapers, and that was pointed out to me by the Secretary of State for Scotland when I asked him to comment on his failure to persuade his ministerial colleagues at the Ministry of Defence to place these orders

with Scottish yards. His press report suggested that the orders for all three submarines would be awarded to Vickers-Cammell Laird. I fully expect the Secretary of State for Defence to confirm that speculation. I say that with some confidence as the Minister of State for Defence Procurement stated on 26 November that the Government believed that there should be a number of submarine builders in the United Kingdom. He said:
It is the Government's intention that there should be a number of submarine builders in this country, just as there are at present. Vickers has a monopoly not of conventional but of nuclear submarines. We envisage that there will be plenty of competition for conventional submarines".—[Official Report, 26 November; Vol. 87, c. 735.]
Much of the press speculation suggests that the orders are heading in precisely the direction of Vickers-Cammell Laird. If that is so, the statement which I have quoted is worthless. Two Scottish yards have tendered for the orders and I wish to confine my remarks—this should surprise no one in the House—to Scott Lithgow.
I was quoted recently in Lloyd's List as having said:
there have been so many marked improvements in the yard that he"—
that is, the Minister of State for Defence Procurement—
can be confident that any defence or offshore orders would not only be built to the high standards expected, but would be delivered on or before the specified delivery.".
Following that quotation in Lloyd's List, I received a letter from a consultant naval architect, who had this to say about Scott Lithgow:
at the time of the 'Ocean Alliance' cancellation in 1983 and subsequently on four occasions since then I have been commissioned by Britoil to make a 'completely independent' evaluation of Scott Lithgow's performance.
It is my belief that your view is fully supportable. If you think I can be of any help, even at this late hour, I shall be very happy to do so.
He has helped me by sending me that letter.
If the Minister's words are to be believed, one of the three orders for SKK2400 diesel electric submarines should go either to Yarrows or to Scott Lithgow. All three should not go to Vickers because that would create a monopoly in conventional submarine building. Vickers already has a monopoly in nuclear submarine building. In fairness to Scott Lithgow, one of the orders should be given to that yard.

Mr. Alan Williams: I am grateful to my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) for being so punctual in concluding his remarks on a matter about which he feels very strongly.
As the Leader of the House will appreciate, Back Benchers highly value both the time available to them on the Adjournment following the passing of the Consolidated Fund Bill and the opportunities that are provided by this motion to raise matters of concern to them. Therefore, it is to be regretted that today there were three statements before the debate on the motion for the Christmas recess. I cannot remember the Consolidated Fund debate starting so late. After all, the House made a concession to the Government by limiting the finishing time of the Consolidated Fund debate rather than it being open-ended as it was previously. In exchange, the Government owe it to the House to ensure that they do not hi-jack the time that legitimately belongs to Back Benchers. I hope that the right hon. Gentleman and his colleagues will ensure that it does not happen again.
My right hon. Friend the Member for Manchester, Wythenshawe (Mr. Morris) raised the critical issue of Manchester airport. I know of the local bitterness over this issue. It is frustrating that, when local authorities have reached an agreement, as a result of doctrinaire pressures by local Conservative Members of Parliament the local authority which seconded the original proposal has about turned and is trying to frustrate the objectives of the people of the area.
We are even more cynical about the matter, having read the memo from a local Conservative Member of Parliament advising his colleagues not to pursue privatisation at this time because it might divert attention from the more important objective initially of separating management from the city. It is clear what the second objective would be. It is a clear case of doctrine having preference over local interest.
The hon. Member for Gedling (Sir P. Holland) pursued a subject which I know he has promoted over the years—the need to contract the number of quangos. He must feel rather bitter about the loss of momentum in that campaign when, at one stage, he appeared to have virtually succeeded in his aims. I find it poetic that the party that is committed to the ending of quangos should give the right to fluoridate to quangos scattered throughout the country, regardless of the wishes of the local people.
The hon. Member for Truro (Mr. Penhaligon) spoke of the problems of the tin industry in his area. I appreciate those problems, because, as he said, it is a saga that we experienced when I was the Minister of State, Department of Industry. I provided the finance that helped to save Wheal Jane at that time. I am sorry that the area is now going through the same torture of uncertainty. I hope that the Government will do everything possible to support and sustain that exceptionally important local industry. This industry is not just important in job terms, but is of symbolic and historical importance to the people of that area.
My hon. Friend the Member for Knowsley, North (Mr. Kilroy-Silk) and the hon. Member for Corby (Mr. Powell) both spoke movingly and with conviction on the problems of unemployment. I can think of no hon. Member in the House who has campaigned more vigorously on behalf of his constituents over the years, under any Administration, than my hon. Friend the Member for Knowsley, North. I can imagine my hon. Friend's bitterness at seeing his area so deprived of hope.
The hon. Member for Corby referred to the locational advantages that the east of the country has over the west. That was a generous statement to make in view of the problems that his area has experienced. It underlines the Opposition's argument that there is a need for a strong regional policy. The Opposition bitterly regret the fact that regional aid has now been cut to 35 per cent. of the figure when the Government came to office.
I read the reaction of hon. Members as they listened to the speech of the hon. Member for Lewisham, East (Mr. Moynihan). All hon. Members were disturbed by the hon. Gentleman's speech, and it must be clearly understood that no one has a right to interfere with a Member of Parliament's correspondence. No one has a right to refuse a Member of Parliament in his duty to fulfil his obligations to his constituents. I hope that that point will be fully understood and appreciated by those who, for reasons

which seem to them to be valid, interfere with the duties of an hon. Member. They should realise that that will inevitably lead to a clash with the House of Commons.
My hon. Friend the Member for Vauxhall (Mr. Holland) made a staggering exposition of detailed research. I congratulate him on that. At the end of his speech I concluded that there must be something wrong with the Charity Commission. As my hon. Friend said, there must be a proper inquiry.
The hon. Member for Meirionnydd Nant Conwy (Mr. Thomas)—he has apologised for his absence—made a reasoned speech about a delicate situation in his constituency in Blaenau Ffestiniog. That area has been dominated for decades by the slate industry. A local employer is refusing to go to arbitration by ACAS, and one of the local directors refuses even to reply to the local Member of Parliament in writing or in person. That savours of stupidity as well as insensitivity. I know that area slightly, and the thought that the firm might recruit labour into the area to take over the jobs of local people is an unbelievably inflammatory thought and is absurd. I congratulate the hon. Member for Meirionnydd Nant Conwy on the delicate tone in which he presented his points.
I should like to make my own bid as to why the House should not adjourn for the Christmas recess on the proposed dates. We should not adjourn until the House has received an apology from the Liberals. Earlier this afternoon I brought to the House a document which detailed double standards in connection with the House. The document was a press release issued by the Leader of the Opposition—I am doing it again. Today would seem to be my day for errors. Of course I meant to say, "the leader of the opposition to everyone", the permanent antis, the Liberals. It is the leader of the Liberal party's document which contains the double standards.
Let us look at double standards and the Liberals. I have some extracts from the document which the Association of Liberal Councillors is sending to Liberal campaigners. It is entitled "Responding to the Competition".

Mr. Penhaligon: That document has been withdrawn.

Mr. Williams: The hon. Gentleman says that it has been withdrawn.
That document urges Liberal campaigners to "Appeal to people's prejudices"—hon. Members should note that they do not appeal to people's common sense or to people's sense of right and wrong, but to their prejudices—
and encourage them to think (a) you are on their side, and (b) those attacking you are by implication attacking ordinary people as well.
The Liberals are not ordinary people. We all know that they are different from everybody else and hon. Members have permanent experience of that in this place.
The document continues:
Make full use of your 'good guy' image".
At least the Liberals have the grace to recognise that they are pure image and front and very little substance. The document goes on to say:
Find out where your opponents' supporters are: you may wish to feed them certain information to mislead your opponent.
That is what the Liberals call political integrity. It continues:
It might be worth encouraging attacks especially if you are up against numerically superior opponents.
That means, "if, democratically, you are outvoted."


It continues:
The British love an underdog, especially one who tearfully tells the press he was 'only trying to stand up for local interests' against a seemingly hostile … majority.
It sounds like a seminar in cynicism. That comes from the party that was lecturing us on observng the correct standards in public life. The document continues:
Be more clever, perhaps by phoning the Tory/Labour agent to say how impressed you were with their production, offer to help deliver the next one, etc.
Where are the good guys? People can pick up a 'phone, lie, cheat and mislead, and it is all for a good, moral objective.
I have seen such cynicism in my constituency. My local Liberal candidate, presenting himself as a Life candidate, came to my surgery to raise an animals issue and told me that he thought experiments should be carried out on subnormal humans rather than on animals. He is now circulating leaflets, again presenting himself as the Life candidate, saying that everyone else is in favour of abortion, but overlooking the fact that the Bill for abortion reform owes its origin to the leader of the Liberal party, the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel). On Second Reading, 10 of the 11 Liberals voted in support of the Bill. That is the quality of life under the morality that the leader of the Liberal party would impose upon us. I should like to hear the views of the Leader of the House on that.

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I shall start by being remorseless and realistic: I stand entirely by my motion. The only thing that might be questioned is whether we are not staying here too late and coming back too early. Therefore, I say at once to all those who have impressed upon me that we should have a shorter recess than I have planned that I shall resist and, if there is a vote, I shall advise my hon. Friends to vote against them.
Hon. Members referred to the shortness of the debates following the passage of the Consolidated Fund Bill. That is not unprecedented. Of course it is not ideal, but it would have been more of a revolution if we had not had the statements on the rate support grant. We have to look at such matters and see whether we can order our affairs with a touch more brevity to protect the business for individual Members that lies ahead. No one can claim that my speech was too long.
I do not wish to be sidetracked by the extraordinary pamphlet prayed in aid to keep us here until Boxing day. It is a disagreeable combination of Machiavelli and Horatio Bottomley. There must be a better way than that of maintaining the moral and intellectual standards of our discussions.
Let me answer the points that were raised in the debate, which was opened by the right hon. Member for Manchester, Wythenshawe (Mr. Morris), who was a powerful advocate on behalf of his hon. Friends of the most important institution of the provinces, Manchester airport. I shall of course report what he said to my right hon. Friend the Secretary of State. I am sure that the right hon. Gentlman will appreciate that I cannot go beyond that at this juncture.
I say fraternally to the hon. Member for Truro (Mr. Penhaligon), in case he thinks that I am ambivalent about

the Liberal party, that he and my hon. Friend the Member for St. Ives (Mr. Harris) have argued their case in measured, eloquent, restrained and therefore much more effective terms, saying what the tin industry means for Cornwall. As the hon. Member for Truro knows, there will be a debate upon that later this evening and clearly a ministerial statement would be appropriate on that occasion.
My hon. Friend the Member for Corby (Mr. Powell) and the hon. Member for Knowsley, North (Mr. Kilroy-Silk) talked about unemployment, and both spoke with the passion that comes from direct constituency interests in these affairs. I was attracted by the argument of my hon. Friend the Member for Corby about the need to raise tax thresholds. It is a part of the debate that continues. Tax cuts are as often as not used merely as a headline to confuse rather than to clarify the nature of the debate. Most people do not think of raising the threshold which, in reality, is the most substantial tax cut and which has considerable potential economic consequences.
I come now to the speech of the hon. Member for Knowsley, North who has explained his absence. There is deep concern in all parts of the House about the continuing high unemployment. I do not wish to elevate the controversy except to say that I believe that there is emerging evidence that at least the phase of the relentless rise is over and we are getting some stability in the national figures. It is true, as we move into a happier phase, that it will be partial in its application across the country.
To follow the practice of the right hon. Member for Swansea, West (Mr. Williams), I couple the speeches of my hon. Friend the Member for Lewisham, East (Mr. Moynihan) and the speech of the hon. Member for Vauxhall (Mr. Holland). I listened with deep concern to the points that were made by my hon. Friend, who has explained that he cannot be here for the end of the debate because he has gone to his constituency to deal specifically with this issue.
I do not know what possible distinction can be drawn between the work of an MP in his constituency and the work of an MP in the House of Commons. The work of an MP within the House of Commons is something we are concerned to protect. In all parts of the House—I welcome the remarks made by the right hon. Member for Swansea, West—there is concern that this matter should be resolved in a way consistent with the responsibilities of Members and their ability to discharge responsibilities without let or hindrance.
The hon. Member for Vauxhall elaborated a breathtaking state of affairs. I used to live in Vauxhall, and indeed the streets he mentioned were all familiar, but I had no idea that I was living so close to this extraordinary development. In my innocence, I used to pass by the Duchy of Cornwall property—which was absolutely blameless. I take his claim that there should be interest shown on the part of the Home Office and the Solicitor-General, and I shall ensure that his remarks are reported to my right hon. Friends.
The hon. Member for Meirionnydd Nant Conwy (Mr. Thomas), like the hon. Member for Truro, raised, with great charm, a most difficult constituency case. All those who know north Wales understand and feel for a region that has its roots, history, culture and economy related to the slate industry. Those who have seen the decline of that industry over the decades would be immensely saddened


if it were further debilitated by industrial action, which would proceed to some gloomy and inexorable consequence.
The hon. Member for Glasgow, Maryhill (Mr. Craigen) drew attention to the inherent difficulties of the closure of an 18-bed ward at Ruchill hospital. I shall certainly pass on to my right hon. Friend the Secretary of State for Scotland the anxieties that have been expressed.
I congratulate my hon. Friend the Member for Basildon (Mr. Amess) on raising the question of hospital radio broadcasting. It was a happy circumstance that no Government involvement seemed to be implied and no public expenditure involved. I wish my hon. Friend many more crusades of a similar nature.
The hon. Member for Greenock and Port Glasgow (Dr. Godman) raised the question of defence procurement and the three submarines. My information from the Ministry of Defence is that it hopes that an announcement will be made shortly. I am aware of the deep and proper constituency concern entertained by the hon. Gentleman, and I shall do my utmost to see that he is correspondingly informed.
My hon. Friend the Member for Gedling (Sir P. Holland) reminded us that he has lost none of his skill, passion and advocacy in regard to quasi-autonomous nongovernmental organisations. I shall report this rather daunting news to my colleagues. It means that they will have to be that much more alert as 1986 proceeds.
My hon. Friend the Member for Gosport (Mr. Viggers) most effectively used an example from his constituency to demonstrate a great many of the problems which relate to parents and their children, given the contrasting and often overlapping responsibilities of public authorities, and the need for the House to turn its attention to that in as much an administrative fashion as any other and to realise that this is a tangible way in which we can confer support on the family as the natural social unit.
My hon. Friend the Member for Leicester, East (Mr. Bruinvels) did a great tour d'horizon. I note his continued interest for a central computer to trace absent children. I also note his tempered involvement in public expenditure restraint when it comes to motorway lighting. I believe that £80 million was put into the kitty, which is not bad for a few minutes in the closing stages of this debate. He nevertheless made an extremely effective case because there are offsetting considerations. I wish him every success, without necessarily endorsing his campaign on drinking and driving.

Mr. Campbell-Savours: Why not?

Mr. Biffen: Many others have campaigned. The hon. Gentleman must not get so excited. We are in the closing minutes of Christmas spirit. I am saying that from the great Plimsoll in the last century, who did a great deal for marine safety, hon. Members have campaigned on these issues. "Keep going" is my message.
My hon. Friend the Member for Welwyn Hatfield (Mr. Murphy) told me that he favours a poll tax, that he does not favour the rate support grant as it applies to Hertfordshire, that he is unhappy about the Government's Sunday shopping legislation and that he has views on the Anglo-Irish accord which are roughly in line with those of the Unionist parties. I shall convey all of those sentiments to my right hon. Friend the Patronage Secretary.
I come finally to the debate that we would all love to have about Government defence policy, nuclear policy and, above all, the delightful way—I accept his candour and sincerity—in which the hon. Member for Leyton. (Mr. Cohen) says that we must disavow our reliance on nuclear weapons. Does that mean that we have to disavow any alliance which relies on nuclear weapons? [HON. MEMBERS: "No."] Oh, I see. We disavow nuclear weapons ourselves. I do not think that the Liberal party should laugh too soon because we shall examine such issues more and more as 1986 proceeds. It is no good believing that we can approach the matter on the basis of the bun and the penny. It is one or the other. Either we are involved with a reliance on nuclear weapons or we are not. To suppose that we can wash our hands but depend on the Americans is the most unseemly stance of all.
I realise that all that now stands before the next debate in which the hon. Member for Linlithgow (Mr. Dalyell) will raise the problems of driver psychology associated with alternative crossing modes of the Channel. The hon. Member gave us Aldabra, Belgrano and the West Lothian question. It looks as though this evening we shall see another great parliamentary saga opening up—and what a glorious way to end this part of the Session.
Question put and agreed to.
Resolved,
That this House at its rising on Friday 20th December do adjourn until Monday 13th January, and that the House shall not adjourn on Friday 20th December until Mr. Speaker shall have reported the Royal Assent to any Acts which have been agreed upon by both Houses.

Orders of the Day — CONSOLIDATED FUND BILL

Order for Second Reading read.

Question, That the Bill be now read a Second time, put forthwith pursuant to Standing order No. 113 (Consolidated Fund Bills), and agreed to.

Bill accordingly read a Second time.

Question, That the Bill be now read the Third time, put and agreed to.

Bill accordingly read the Third time, and passed.

Orders of the Day — Channel Fixed Link

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Maude.]

Mr. Tam Dalyell: This is a saga, because one of the prime duties of politicians is to warn their colleagues of all parties and their fellow countrymen about all-too-likely future fiascos and catastrophes.
I am no regular Jeremiah, but I foresee mid-channel mayhem in the mid-1990s, and 10-mile tailbacks in both directions under the Channel. Fanciful? If it can happen on the M6 and M25, why should it not occur under the Channel? I am using my luck in the Consolidated Fund draw, either to establish my fears about the Channel road link, or to have them refuted. I do not blame the Minister for not answering the questions about driver psychology that I asked in Monday's debate, which are reported in the Official Report c. 703, because I made a three-minute speech at the fag end of the discussion. Nevertheless, they remain unanswered.
In this era of "Members' interests," I had better say that I have the good fortune to be sponsored by the National Union of Railwaymen. But, as George Walkinshaw, Jimmy Knapp and Keith Hill will bear out, I initiated the discussion on this subject of driver psychology a month ago at the political committee of the NUR. Although the union has been extremely kind to my constituency Labour party, I am not a creature of the union
On purpose, I have never knowingly talked to, or had a meal from any commercial lobbyist or organisation involved in the Channel link.
The genesis of the debate was when, some years ago, I was stuck in the Dartford tunnel in a jam with my wife feeling increasingly sick from the fumes, and two whimpering small children in the back of the car. That is not an uncommon experience in the relatively short British tunnels.
The issue tonight is whether travellers who wish to accompany their vehicles across the Channel should be allowed to drive them, or whether they should be carried across with the vehicles by train. I am worried about highway hypnosis, and I had better define it carefully. It is
the rigid cognitive set developing and creating a subjective notion of unchanging visual surroundings.
Highway hypnosis is associated with mental relaxation and lowered alertness. Bluntly, a great deal has been said even about the flora and fauna of Kent but not much about the psychology of humankind. Motorway madness has not had the consideration for the dimension of the Channel tunnel saga that it should have had. The serious work that has been done should make even the friends of the M6 a little uncomfortable.
G. W. Williams in his 1983 paper on highway hypnosis suggests that the monotony of the surroundings and the necessity to attend only to a small part of the visual field may induce some kind of hypnotic trance. The Department may have carried out serious work, but Mick Hamer of New Scientist has outlined all the cuts that have been made in the Transport and Road Research Laboratory, and the work that I have seen leads to the conclusion that a road link is flawed.
I have received a letter from the excellent scientific librarian of the Library, Dr. John Poole, who has served many Members well. I asked him to establish what the TRRL was doing, and he replied: "I duly rang up a psychologist at TRRL, who rang me to say that he was not at liberty to tell me anything about the R and D programme. He referred me to an assistant secretary of the DoT." Why cannot the TRRL have frank relations with the Library? For time's sake—I think of those who will be present at 9 o'clock tomorrow morning—I refer the Minister to the article in New Scientist of 5 September 1985, which shows how the TRRL has been affected by cuts. What work is the laboratory doing on the psychology of driving through the tunnel?
It is not that I have a bee in my bonnet. I have permission from the first five parliamentary colleagues whom I approached, to read what they told me. My hon.
Friend the Member for Greenwich (Mr. Barnett) states:
I find even going through the Blackwall Tunnel a worrying experience. Certainly I feel a sense of relief to come out the other side.
That is after the long distance between Greenwich and Tower Hamlets. My hon. Friend the Member for Monklands, West (Mr. Clarke) states:
I find the short distance involved in driving through the Clyde tunnel to be oppressive; I hesitate to think what the cross-channel link will be like.
My hon. Friend the Member for Liverpool, Walton (Mr.
Heffer) states:
I am always reluctant to go through the Mersey Tunnel; I would find the Channel Tunnel impossible.
My hon. Friend the Member for East Lothian (Mr. Home Robertson) states:
I drive about 25,000 miles every year, and I do not suffer from claustrophia. But nothing would induce me to endure the tension of driving through a tunnel for half an hour.
My right hon. Friend the Member for Morley and Leeds,
South (Mr. Rees), a former Home Secretary, states:
It is one thing to sit in a train through a long tunnel—even if it requires a certain effort. It is another to drive a car through a long tunnel with that light at the end a long way off. It will be a long time before drive from Calais to Dover and when I do I hope there is room to pass by easily those who have given it up as a bad job.
My hon. Friend the noble Lord Carmichael of Kelvingrove, formerly responsible for transport, said:
The second reservation is perhaps more substantial, and it has been mentioned by many noble Lords here. It concerns the question of driving through a 30-mile tunnel. I am always amused when I see the rather over-enthusiastic artists' impression of such things as these tunnels. You always see the lone motor-car, the Fiesta, the Metro or the Novo driving through a beautiful, clean well painted bright tunnel. You never see Aunt Agatha"—[Official Report, House of Lords, 13 December 1985; Vol. 469, c. 515.]—

Mr. Speaker: Order. I hope that the hon. Gentleman is not quoting from the Lords Hansard.

Mr. Dalyell: I must confess that I was, but I know that I should not.

Mr. D. N. Campbell-Savours: How does my hon. Friend respond to the experience of those who travel between France and Italy, who regularly pass through the 20-kilometre Mont Blanc tunnel but have no difficulties?

Mr. Dalyell: Ten miles, but I shall come to that later.

Mr. Donald Dewar: Will my hon. Friend give way?

Mr. Dalyell: No.
Those were the collected views of people in the prime of life. What about our weaker, less experienced brethren, or sisters too, for that matter?
Some of my constituents say that they will drive from Edinburgh to Paris. Bluntly—I do not know whether this is a parliamentary word—they will be knackered by the time that they reach the entrance to the Tunnel. Most of my constituents are sensible people, but even in Linlithgow there is the occasional nut behind the wheel. That proves the case, because it needs only one nut to create motorway havoc.
Consider driving from Paris after that last good meal. The whole scenario of returning from a continental holiday has the ingredients of tragedy. Motor magazine of 28 September 1985 states:
It's the last weekend in July 1992, and you're driving at 70 mph in bumper-to-bumber traffic in a tunnel 120 ft below the sea bed, halfway between Dover and Calais. Suddenly a 12-year-old Cortina seizes up in front of you and, as you stand on the brakes, you hear the screech of a dozen massive tyres behind you as a fully-laden juggernaut skids towards your rear bumper.
The longest tunnel in Europe, for the information of my hon. Friend the Member for Workington (Mr. Campbell-Savours), is the Gotthard, which is 10–1 miles long. First-time motorists have difficulty envisaging the experience of travelling through it. Would any of us drive through a tunnel at 60 mph? Most of us would not go at more than 40 mph. What about overtaking, and what happens when the lighting goes wrong? What happens when cars run out of petrol? Some of us have suffered the indignity of running out of petrol when the gauges in our cars were defective. It happens to the best of us. What about the weekend drivers, just popping across to the Continent?
In the experience of the Simplon and of Japan, we have nothing like this. No one has driven through a 30-mile tunnel. I should tell my hon. Friend the Member for Workington (Mr. Campbell-Savours) that the Channel expressway would be four and a half times longer than the Gotthard tunnel.
The subject has been studied by many psychologists. A paper published by Wertheim explains highway hypnosis, based on a theory validated in experimental research. Wertheim acknowledges that the explanation of Williams and others is difficult to verify, not least because the concept of monotony is not easily measured in such a way as to enable scientific experimentation. However, he argues that it is not monotony but predictability of the road situation that is crucial to the explanation of highway hypnosis.
The main points in the theory are as follows. Some of our mental abilities are related to the activity of our oculomotor system—the neurological system responsible for the initiation of eye movements. Car driving is a task where specific eye movements are required to follow predictable movements in the visual environment—other traffic vehicles as well as changes in the road. The more predictable those movements and changes, the more oculomotor control becomes intentive at the expense of the attentive component. As a result, drivers disregard most of the information present in the external visual field because of its irrelevance to driving performance. Thus, oculomotor control may become dependent on information derived from the perception of very few visual signals. In addition, those signals may become highly predictable in their movement pattern, especially during prolonged

driving on long unchanging stretches of highway or during prolonged single file driving. That is what we are talking about in relation to the Channel. The Minister will contradict me if I am wrong about that.
The conditions thought to cause highway hypnosis would appear to prevail in the tunnel schemes; the visual images presented to a driver going across the bridge or through the tunnel seem especially prone to the predictability of the road situation examined by Wertheim. If it is, effects of such conditions on drivers should be understood in much greater detail during the design stages of the tunnel schemes. Symptoms affecting only a few drivers could have significant dangers for the functioning of the tunnel. Even 1 per cent. of drivers could create a dramatic incident in mid-Channel. It would need only a few fools, a few inexperienced drivers or a few panicking drivers to create such trouble.
Fatigue is not necessarily related to highway hypnosis but, according to the man who has done the work—Wertheim—it may sometimes have a facilitatory effect on its development. In general, there is likely to be recognition by motorists that there is danger in driving where certain circumstances may induce boredom, lack of attention or drowsiness.
Psychologists at the Institute for Science of Labour in Kawasaki, Japan, undertook a study of fatigue of bullet train drivers operating on multi-tunnelled sections. They recorded changes in the cab environment, heart rate, ear lobe, blood pressure, eye movement, flicker fusion frequency, responses to secondarily given visual signals and subjective fatigue. They concluded that continuous driving through tunnels "significantly hampers vigilance" and requires
countermeasures against monotonous driving situations.
The generally monotonic driving situations through tunnels caused gradual decrease in heart rate and low flicker fusion frequency. The subjective fatigues scores
increased remarkably during the journey.
Although driving such trains may not be strictly comparable with driving vehicles in well-lit tunnels, it is further medical research evidence that moving through a tunnel over long distances may have effects on driver vigilance that are not sufficiently understood.
I do not wish to boast about it, but I studied psychology for a year at Edinburgh university, and I know enough to say that this is a serious argument.
There is a serious risk of accidents in road tunnel schemes. The consequences of simple errors in driving in tunnels are illustrated in the case of the Caldecott tunnel. This extract from the official investigation serves to illustrate the possible dangers of road accidents in tunnels. This is from the official documents from California. They say:
At about 12·12 am on April 7, 1982, several vehicles on a westbound California State Route 24 entered the north, No. 3 Bore of the Caldecott Tunnel near Oakland, California. A Honda car driven by an intoxicated driver struck the raised kerbs inside the tunnel and came to rest at the left edge of the roadway about a third of the way through the tunnel. It was struck soon afterwards by a following gasoline tank truck and tank trailer and then by an AC Transit bus which subsequently struck the tank trailer. The bus driver was ejected, and the empty bus continued west, exited the tunnel, and struck a concrete road support pier. The tank trailer overturned, and gasoline was spilled inside the tunnel. A fire erupted and heavy black smoke quickly filled the tunnel. The tank truck and tank trailer, the Honda car, and four other vehicles that had entered the tunnel were completely


destroyed by the tire. Seven persons were killed and two people were treated for minor smoke inhalation. The tunnel incurred major damage.
What happens should that happen mid-Channel? The National Transportation Safety Board determined that the probable cause of this accident—

Mr. Peter Snape: It might well happen here.

Mr. Dalyell: Of course it might.
The board said that the probable cause of the accident was a combination of events involving first the erratic driving by the intoxicated driver of a passenger vehicle which stopped in a through-traffic lane, creating a traffic obstacle. It is perfectly possible for somebody who enters the tunnel from France or England to be intoxicated—there are no checks on that. A second factor in the accident was the inattention of the truck driver in causing his vehicle to strke the passenger vehicle. Many of the main lobbyists for a tunnel are the big truck-driving firms, whose drivers have to wait for the boats.
A third factor was the bus driver overtaking the truck too rapidly to avoid striking the passenger vehicle when it unexpectedly appeared in the path of his bus. There we return to the point made by my right hon. Friend the Member for Morley and Leeds, South.
Contributing to the cause and the severity of the accident was the presence of a flammable cargo tank truck and cargo tank trailer in the tunnel and the damage to the overturned trailer, which permitted a loss of flammable cargo and a fire. How does one control a fire in a confined space of parked vehicles? That question is at least worth answering.
Also contributing to the severity of the accident and injuries were the lack of adequate monitoring capabilities and the variable message signs or traffic signals at the entrance of the tunnel and within the tunnel, and the lack of a communications system betwen the tunnel personnel and the tunnel occupants, which if present, might have facilitated occupant evacuation.
Related to this is the proposition of driving over long bridges. I represent the area at the south end of the Forth brige. The vehicles have to go over, in moderate and high winds, two by two like the animals into Noah's ark, because, rightly, of police regulations. The winds in the Forth are nothing like those that blow up the Channel. Once again, problems are caused.
I refer to one letter of many that I have had, from Mr. G. D. Austin of 28 Alexandra road, Peterborough:
Dear Tam Dalyell,
I noted your little piece in the newspaper about driving twenty five miles through a proposed Channel Tunnel, yes the Dartford tunnel is bad enough, we have to pass through the Dartford Tunnel when visiting my son in Canterbury, and I note when looking into the driving mirror that my wife always covers her eyes when going through this tunnel (she always prefers to sit in the back).
Now! on our last trip through the Dartford Tunnel in the late summer, the atmosphere was like a blue mist, being an ex-fireman I quickly realised the risk with what of course were petrol exhaust fumes, we were at the point of no return, so I at once instructed my wife and son, to close all windows tight, and to shut all ventilators in the car, even so the smell of exhaust fumes was terrific, and it was with a sigh of relief that we emerged at the Cambridge end.
If people cannot cope with the Dartford tunnel, how the heck does one know that they can cope with a Channel tunnel? Having skilled and experienced railway engine

drivers—trained professionally—is one thing. Letting loose Uncle Tom Cobbleigh and all behind the wheel of a motor car is another.
We have to look at the effects of stress. The research by Dr. Ivor Brown and Dr. Roger Watt has shown that a large proportion of professional drivers flout the European Community regulations on hours of work. Many heavy goods vehicle and public service vehicle drivers are therefore suffering from the effects of driving fatigue, sleep loss and sleep disturbance. Many tourists are also fatigued from over-long periods at the wheel between home and their holiday destination. An enforced speed limit and the tedium of convoy driving may therefore depress to dangerously low levels the alertness of many commercial and private motorists using the tunnel, particularly from the southerly direction.
It is possible that the unusual conditions of tunnel driving will be sufficiently stimulating as largely to offset the effects of fatigue and sleep loss, at least initially. Thus, the effects of these forms of stress are likely to appear later in the journey through the tunnel, if they occur at all. Serious consideration must be given to the alleviation of these effects, if mid-tunnel multiple collisions are to be avoided. It is the multiple collisions, mid-tunnel, that concern many of us.
The two main effects to be guarded against are so-called "micro-sleep" and distraction. Micro-sleep, as the name implies, is a condition in which the driver actually loses consciousness for very brief periods. The experience is quite common. In a study of some 2,000 motorway and A-road accidents among truck and bus drivers, it was found that around 10 per cent. were preoccupied or distracted and that about 5 per cent. were actually asleep, just prior to the collision. Distraction occurs because fatigue causes the composite skill of driving to disintegrate. Thus, attention is given to events which may be of only peripheral interest for driving, and important sources of information are ignored.
Remedial measures against fatigue can therefore take two forms. The first is the establishment of advisory or mandatory, headways which are greater than the normally safe two seconds. This allows more time for recovery, even in the event of micro-sleep, but clearly it is not an infallible remedy. People are usually very good at detecting closure with an obstacle ahead. This ability could be aided by requiring the use of lights by all vehicles in the tunnel, but again this will be an ineffective measure if drivers are distracted. Are we to say that drivers will never be distracted? The introduction of special "arousing" stimuli to maintain the driver's level of alertness at an appropriately high level should be seriously considered.
Arousing stimuli can be visual or auditory. The former can take the form of verbal messages, light signals or markings on the road surface or tunnel walls. The latter can take the form of music, speech or warning tones. If one has to go to the length of introducing music or warning tones, one cannot be certain that there will never be major accidents. I repeat that, if this can happen on the M6, resulting in the kind of tragedy that has been reported to the House, how can one say that it will never happen on the Channel tunnel motorway? Repetitive stimuli produce a condition termed "reactive inhibition" in which the person ceases to respond appropriately to external stimuli. Any alerting system for drivers therefore needs to present continually changing sensations if it is to remain effective.
The auditory channel is more effective than the visual for alerting drivers, since it does not require the conscious direction of attention. However, specific applied studies would be required in order to establish the feasibility of auditory alerting devices, since ambient noise levels in the tunnel are likely to be high and warnings must not be pitched so high above them that they produce startle responses.
If auditory alerting techniques are adopted, advantage should be taken of the research on auditory warnings conducted at the MRC's applied psychology unit. The aim of this research has been to develop a technique by which the spectral characteristics of signal and background noise are specified so as to maximise the warning effect at minimal sound pressure levels in the signal.
Many users of the tunnel, at least in the summer, will be families. Young children will perhaps find the experience unpleasant and could then become an extra distraction for the driver. There is considerable scope for providing entertainment for young children. A painting of a different "Mr. Men" character at frequent intervals could help the time to pass quickly for them. In a similar vein, weather reports and pictures of tourist landmarks could be useful for passengers who are not quite so young. Clearly these should not be eye-catching to the driver, and high pressure advertising would be undesirable.
It is strongly recommended, say the psychologists, that some form of visual or auditory alerting system should be incorporated in the tunnel design to offset any difficulties which may result from driving fatigue or the tedium of tunnel driving. Research is required on the specific form that this signal should take.
If one goes to that extent to try to provide safety, how can any of us think that safety can be so certain as to ensure that there is not the nightmare of accidents which could lead to catastrophe?
What about the mixture of right-hand and left-hand drive vehicles in two-lane, one-way tunnels? What about the change at the French end? It is one matter to drive on the other side of the road after a two-hour boat journey, but if there are no boats and no bateaux and people suddenly have to change over, what difficulties will that create? We must remember that reflex actions are involved, especially when overtaking. Such details must be discussed now rather than later.
We could be the biggest Charlies of the 20th century. Let us imagine, week in and week out, sub-Channel pileups. It would be like the road between Cockbridge and Tomintoul. That is just about as reliable as the road from Banchory to Fettercairn in mid-winter. To imagine that we can have a successful road under the Channel is ill-conceived to a hazardous extent.
What work did the Department do before presenting a fait accompli? The trouble is that civil servants did not give evidence for the rail-only solution to the Select Committee because they did not think that Ministers would wear it. Civil servants should present to the Select Committee all the options, if there is a convincing answer to the problems that I have raised, either now or by letter in the new year, which should be made public to my colleagues. I would accept that publicly and privately. If a convincing answer—

Mr. Snape: Has my hon. Friend considered the role of civil servants, because like Ministers they are hostile to a rail link as they are hostile to railways anywhere else in the country?

Mr. Dalyell: I have a high regard for the Civil Service. I have been listening this afternoon to the Select Committee chaired by my hon. Friend the Member for Great Grimsby (Mr. Mitchell) which was examining Clive Ponting. Civil servants have difficulties, but I agree with my hon. Friend's substantial point. The Civil Service should be able to speak frankly and fearlessly, without ministerial pressure. However, I am upset that the TRRL apparently is not to be able to make its views known. I should like to have the candid view of those experts about the points that I have raised.
If Ministers at the Department of Transport cannot produce convincing answers, officials and Ministers will, I fear, find me as persistent, as difficult and as time-consuming as do their colleagues in the Ministry of Defence.

Sir John Osborn: Last week, on 9 December, I declared my interest in that debate because I am joint chairman of the all-party Channel tunnel group. The hon. Member for West Bromwich, East (Mr. Snape) is the other chairman. We have tried objectively to examine the options which the Government are considering. As I explained then, the group goes back about 50 years, and I have been associated with it for 25 years.
At a conference and exhibition in Lille last Monday, the French, because of this event's association with Trans Manche, insisted upon introducing me as the president of the British fixed link committee. I shall try to be objective, although the hon. Member for Linlithgow (Mr. Dalyell) has confessed his interest in and sympathy for the National Union of Railwaymen. In a humorous and delightful way he described the horrors of driving through tunnels.
They are also the anxieties of a motorist, whether he is stuck on the boulevard peripherique or the latest innovation of that—judging by the comments of some motorists who live near it—the M25. It must be accepted that statistically motorways are safer than other roads, though when an accident does occur it can be horrific, as many know to their cost.
I have previously said—I shall illustrate the reason for holding this view—that I like the idea of driving through a Channel tunnel. However, the point that the hon. Member for Linlithgow raised needs close consideration, for it is necessary to bear in mind the psychological reaction of drivers in a tunnel 27 miles long. Frankly, I do not know what that reaction is likely to be.
When the House debated this issue recently, the Parliamentary Under-Secretary pointed out that that and other matters were being examined by the Transport and Road Research Laboratory, an organisation for which, I am sure, the hon. Member for Linlithgow has as much respect as I have, but is it possible to simulate the reaction of a driver in a tunnel for 30 minutes when at present no such tunnel exists? Is it possible to gauge that, whatever equipment is devised? I am not criticising the transport laboratory.
I, too, have made inquiries, being an enthusiastic motorist. You will know, Mr. Speaker, that the House of


Commons Motor Club, in which you have taken a close interest, is a body of which I have been chairman. By chance, that club visited the Institute of Advanced Motorists' centre at Chiswick today. The institute's theme is "Safe driving", and I have been president of the Sheffield branch for 25 years. I wanted to obtain the reaction of that institute, but I was not able to get a considered reply about whether it was safe to contemplate driving through 27 miles of tunnel. Thus, the motoring organisations are not united on whether the projects that have been put forward have been well worked out.
I have examined again the excellent report of the Select Committee. That Committee doubted the validity of the traffic forecasts and pointed out that they were not required by the Government to be submitted in the same format and to be based on common assumptions. The Committee added:
It is consequently very difficult for the Committee to make detailed comparisons between the schemes.
I should have liked those detailed comparisons to enable me properly to discuss this issue, but I could not obtain them.
Those advancing the Channel expressway put the case over in Lille extremely well. They have their own views on the number of air travellers that the expressway will attract. They believe that passengers and cars with drivers will number 2·4 million in 1991, that there will be just over 1 million lorries, and that rail and foot passengers will number 4·4 million. I should like to compare those with other forecasts, and I hope that the Minister will give some statistics of traffic forecasts.
The promoters of the expressway said:
All types of internal combustion engine vehicles can drive through at 100 km/hr (62·5 mph) taking 30 minutes to do so.
I was interested to read in one of their documents in respect of safety and the problems of fatigue or becoming mesmerised through driving for 30 minutes along a straight tunnel:
There is not a shred of evidence to support the allegations of driver fatigue or uncontrolled operation of motor vehicles in excess of that incurred on motorways by virtue of driving through a 50 km properly designed tunnel … All modern devices which have been found useful for keeping the driver alert for open road and tunnel driving have been incorporated into the Channel Expressway, such as strong lighting, signalling, roadway surface variations, painting and closed circuit radio systems.
That was described in their video. I hope that the assessors will question whether that has been gone into in adequate detail.

Sir John Wells: Is it not true that the expressway scheme has been vetted by some eminent medical people? Naturally we want to have a governmental medical view, but I believe that the expressway promoters have gone to a lot of trouble on the medical point.

Sir John Osborn: Yes, and their report refers to that. The assessors must question that medical evidence, and I would wish to see that. Of course the adequacy of the ventilation must be questioned.
Euroroute has a slightly different idea of speeds—100 kph on bridges, 80 kph in tunnels and 50 kph on the islands—the spiralling projects. Euroroute states that it will install sophisticated traffic management and control systems using closed circuit television cameras, excellent lighting throughout the link, frequent patrols and 24-hour

assistance teams to provide fast response. That is all nicely put down in the document, but how will it work in practice?
Will the spirals be safe? Will traffic be able to move without problems, without skidding or braking? The report says that the maximum gradient of 3·5 per cent. is half that on the Hyde Park underpass, and it points out that the radius of the helix is considerable, making the diameter rather larger then Trafalgar square. However, or, a long journey, four of five circles, particularly for a heavy goods vehicle driver, could be a little detrimental. It says that two independent driver psychologists have reviewed the road link and reported that driving conditions on the bridge and tunnel sections will be as good if not better than on existing roads.
The hon. Member for Linlithgow makes me want my hon. Friend the Minister to look at the matter. Obviously I have looked at the traffic density put forward by the Channel tunnel group. It is definitely using a shuttle—a railway carriage in the old definition; one able to carry heavy vehicles, another with two tiers to carry cars. It points out that passengers will suffer less stress; that there will be none of the disorientation that could arise from driving through a long distance tunnel. There will be immunity from road traffic delays, traffic accidents and the vagaries of the weather. It also points out that accident rates on straight rail lines with no interconnecting rail line compare favourably with the accident rate on motorways.
I come back to my own experience. I have said previously that there was a debate on the bridge versus the tunnel in the early 1970s, at the Institute of Civil Engineers. The hon. Member for Linlithgow might have been there, through the parliamentary and scientific committee. A paper was given by General Sverdrop, who had just built the tunnel embankment bridge complex across Chesapeake Bay. I described how in 1972 I went across Transpo' 72 in Washington and met General Sverdrop. He arranged for me to visit that complex. I think that I crossed 22 miles in 17 minutes. I am not sure of my facts, because I might have been travelling above the American speed limit. I might have had a slightly fast driver. I liked that. However, the first year of work on Chesapeake Bay had a setback because a ship rammed into the bridge and it took several months to repair it, with a consequential loss of tolls.
Another experience was more than 30 years ago, when I drove from Milan to Zurich over the Lukmanier pass, which is next to the St. Gotthard pass. It was a tiring, all-day journey. I set off in the morning and arrived at around 8 pm or 9 pm, rather late for a business dinner. This summer I drove through the St. Gotthard tunnel—unaware that there was a tunnel, let alone that it was 17 km or about 10 miles long. I understand that it is planned to have two tunnels, but at the moment there is one tunnel with two-way traffic. There are notices telling cars and lorries to keep their distance and I had no problem in driving through that tunnel with the other vehicles, even in two-way traffic, although it was a novel and unexpected experience. I understand, however, that one or two drivers who have deliberately driven through the tunnel three times in quick succession to achieve the distance have found the 50 km drive far more exhausting.

Mr. Dalyell: The hon. Gentleman is a good driver.

Sir John Osborn: I like to think so, and I aim to be so. I am grateful for the hon. Gentleman's kind words.

Mr. Greg Knight: In the light of my hon. Friend's remarks and of the earlier comments, is not the answer to have a road and rail link both going through the tunnel so that the driver has a choice? If a driver feels tired, he can use the rail link and have his car transported, but if, like my hon. Friend, he regards it as a novel experience, he can choose to drive.

Sir John Osborn: My hon. Friend tempts me to embark on a full discussion of the wider options.
My hon. Friend organised an excellent meeting at the Institute of Advanced Motorists, which now has about 85,000 members out of perhaps 25 million drivers. A further 260,000 or so have taken the institute's test, so there might be 500,000 drivers in this country who can claim to be able to concentrate and to cope with any situation. I have no doubt that they could drive through a tunnel of the proposed length, but whether the entire 25 million would be capable of doing so is a matter of doubt.
The hon. Member for Linlithgow referred to a fire in a tunnel in the United States. Matters of that kind must constantly be borne in mind. I ask my hon. Friend the Minister, however, to inquire what problems the Italians, the Austrians or the Swiss have had with the Mont Blanc tunnel or with the St. Gotthard, which is currently the longest in the world. I believe that when drivers, especially heavy vehicle drivers, become used to driving through tunnels they temper their manner and drive more soberly, just as British drivers are now better adjusted to motorway driving than they were when motorways were introduced 20 years ago.
The hon. Member for Linlithgow has convinced me by raising the subject today and by his comments that the concept put forward by the Government in 1974 and by the Channel tunnel group now has much to commend it. My hon. Friend the Member for Derby, North (Mr. Knight) has drawn me slightly on this. I should like him to consider the possibility of a shuttle as the first move. This would accommodate drivers who did not wish to drive through the tunnel. Certain categories of heavy vehicle which should not be allowed to go through the tunnel could be diverted to ferries or go on a shuttle if there is subsequently a road tunnel as an additional option. In my view, certain types of goods—for instance, dangerous chemicals and highly inflammable materials—should not go into the tunnel at all, but should always be carried by ferry.
I hope that my hon. Friend the Member for Derby, North will agree that I am concerned about these issues. I am concerned that the two Governments should make the right decision, and also that that decision should not eliminate the use of ferries when the first tunnel is built. I have been drawn a little further than the question of safety, but I look forward to the Minister's reply.

Mr. Peter Snape: The House will be grateful to my hon. Friend the Member for Linlithgow (Mr. Dalyell) for raising this subject and for the way in which he expressed his point of view.
In a way it is ironic that we should need such a debate, because one would have thought that a Government who were so obviously committed to some sort of fixed link—as the present Government appear to be—would have undertaken some research into the effects of driving long distances in a straight line. I hope that in his reply the Minister will address himself to the questions put by my

hon. Friend the Member for Linlithgow and also to some of the points that were understandably and relevantly raised by the hon. Member for Sheffield, Hallam (Sir J. Osborn), who is co-chairman of the all-party Channel Tunnel Group.
I have not had the same number of years in that position as has the hon. Gentleman, but he will be aware, as other hon. Members are, that I have been in favour of a rail Channel tunnel for some years. I hope that that will not affect what I shall say tonight.

Sir John Osborn: Perhaps I should point out that my hon. Friend the Member for Maidstone (Sir J. Wells) was chairman for many years. Along with the hon. Gentleman, I have been co-chairman for only 18 months. I would not like him to give the impression that I have been chairman for 25 years.

Mr. Snape: I am grateful to the hon. Gentleman. I should have said that in one way or another he has been connected with this project for considerably longer than I have.
The fact that we are having this debate demonstrates the enormous power of the road lobby, which insists that Governments of both political hues should cravenly accept that, whatever improvement is needed to our transport infrastructure, the road lobby must be catered for first and foremost. It continues to demand enormous public expenditure on such improvements on the ground that the lorry and private car should be allowed to go anywhere the driver wishes to go.

Mr. Greg Knight: What about the rail lobby?

Mr. Snape: If the hon. Gentleman has something to say, he should get to his feet in the normal way.

Mr. Knight: I am grateful to the hon. Gentleman. The points he is making could just as easily be applied to the rail lobby.

Mr. Snape: That might well be so, but, given transport history over the last 25 years, it is clear that the road lobby has been far more successful. Given the way in which the hon. Gentleman has put his view, it looks as if even he has succumbed to the argument that the private motorist and the heavy goods vehicle driver should be allowed to go wherever he or she likes and that it is the job of the Department of Transport to provide the infrastructure to allow them to do just that.
I make no apology for disagreeing with that view. I am well aware that many of the proponents of the fixed link have referred to public opinion polls which have shown that people would prefer to drive all the way across the Channel. There is nothing surprising about that. Ask average motorists whether they would prefer to go to the moon in a spaceship or to fly themselves, and a substantial proportion would say that they preferred to fly themselves rather than rely on someone else. I must therefore discount that sort of evidence.
The tragedy is that, if the Channel tunnel had been built when the idea was first mooted, it would have been a rail-only tunnel. I do not normally praise the foresight of Victorian business men, but I believe that Sir Edward Watkin, the chairman of the London and South-East Railway, was right when he said all those years ago that a channel fixed link—he did not say rail-only, but it was presumed that it would be—was sensible. In talking


of through trains from Waterloo to Paris and other continental cities, he was speaking with a great deal of foresight.
These days it is different. The fact that there is a demand for the type of options that the hon. Member for Derby, North (Mr. Knight) mentioned owes much to the strength of the road lobby. The lobby seems to forget that a torrent of cars and lorries will cause immense environmental problems in south England and north France. They will cause immense traffic and pollution problems in the tunnel.
Most hon. Members spend a considerable time behind the wheel of their cars. Some might say that they prefer to travel by some alternative means, as I do. I would prefer to go to my constituency—or at least as close as I can get to it—by rail, but it is often necessary for me to use my car. Those of us who travel a considerable number of miles are aware of the stupid behaviour of the minority of motorists, which can be seen most days, especially on the motorways but also on any trunk road or road in an urban area. Most people would be prepared to concede that an accident in a 21-mile or longer tunnel would have a greater effect than a similar accident on a motorway. Of course, our motorways are safer than most other roads, but, by the nature of the speed and type of traffic on motorways, an accident on a motorway is normally more serious than an accident on a minor road. I think that anyone who is prepared to be fair would concede that it is a matter of time before a major accident takes place under the English channel, if there is a fixed link that provides an opportunity for the two modes of transport—road and rail—to be used.
I do not want to be accused of painting an unduly lurid picture of what might happen. My hon. Friend the Member for Linlithgow showed the picture humorously and dispassionately in talking about accidents in tunnels in other parts of the world. I do not think that any of us would like to be in our cars if carnage of the sort that happened on the M6 a few weeks ago were to take place within the confines of a tunnel. I imagine that the tragic and appalling loss of life that occurred on the M6 would be multiplied considerably if there were a similar incident in a tunnel stretching across the Channel.
My hon. Friend the Member for Linlithgow talked understandably about the problems of exhaust fumes and the ventilation of a Channel tunnel. I am aware that some of the bidders have said that with the technological developments of recent years it will not be too great a problem to extract exhaust fumes from a tunnel, but there will be a navigation hazard wherever the fumes are extracted.
It is argued that it is safe to sail across or up and down the Channel. If we are talking about hazards below the Channel, we should talk also of some of the hazards on the surface, and I should like to know what research the Department of Transport has undertaken. We all know that there are about 300 near misses or near accidents in the Channel each year. If we were to add even more navigation hazards, as some of the schemes for the fixed Channel link are supposed to do, it is likely that there would be even more problems or accidents than at present.
I am aware that the Minister might say that there is nothing new about the bridge technology that would be involved. I accept that modern ships are equipped with better navigational equipment than hitherto, but, I have in mind a large tanker, such as the Torrey Canyon of 1960s

fame, drifting out of control in the Channel and striking one of the likely navigation hazards. There are problems with a fixed link above the surface as there are with one below.
Of the schemes that are shortly to be considered by the Department, one of the front runners appears to be the Euroroute, which is the part-bridge, part-tunnel scheme. According to the newspapers, it was regarded as the favourite a few months ago. It has the drawback of featuring a bridge out to an artificial island, and my comments about shipping hazards must apply to an artificial island. Road traffic would have to travel to the island before descending a futuristic spiral which would take it beneath the sea.
If the average motorist is asked in a questionnaire whether he or she would prefer to drive across the Channel, I do not believe that he or she would pause to consider factors such as strain and sheer boredom, which would be involved in driving for a considerable time in a straight line in a tunnel below the sea. Those who built some of the long-distance roads in other parts of the world soon realised that straight-line roads were a likely cause of accidents. Most of us know who spend any time on motorways how easy it is to lose concentration and to indulge in what my hon. Friend described as microsleep. How much more likely it is to lose concentration and be more susceptible to microsleep when travelling in a straight line.
We all know that if we open the Channel fixed link to everybody, among those sitting behind the wheel will be a fair proportion of people with things on their minds that stop them from concentrating on their driving, a proportion of drivers who have drunk too much, a proportion of people who should not be allowed behind a wheel at any time, on any road—but who, thanks to our 50-year-old driving test, can drive legally—and a proportion of drivers, especially of heavy lorries, who will be anxious to get to their destination as quickly as possible because time is money.
That explosive mixture below the surface of the English Channel is an unacceptable risk. I hope that the Minister will tell the House what research is underway into those factors, and whether they will be taken into consideration before the Government announce which of the proposed schemes is to be accepted.
The hon. Member for Derby, North said that if drivers felt that they were not up to the psychological impact of driving through a tunnel, they could take the train. If he thinks about it, he will recognise that that is a naive way of looking at the matter—

Mr. Allan Rogers: The hon. Gentleman is daft, not naive.

Mr. Snape: I would not be so unkind. It is a naive way of looking at human reactions. If someone was driving from the West Country to Scotland, but not feeling quite up to that, it would be possible to put the car on a motorail train in ride to Scotland. But the number of impulse buyers of motorail tickets is infinitesimal, to say the least.
If a driver has decided to drive to the Continent and back, he will do so regardless of his physical condition or the availability of alternative services.

Mr. Greg Knight: The hon. Gentleman is slightly distorting what I said. My earlier intervention was in response to the point of my hon. Friend the Member for


Sheffield, Hallam (Sir J. Osborn), who referred to the person who had driven through the tunnel once, then back through the same tunnel, then back again, and then back yet again for the fourth time.
While I accept that someone going on a long journey who has packed his car might, if he had the choice, decide to drive through the Channel tunnel, if on his return from his holiday he felt rather tired when he reached the link, if there is the alternative available of using a rail service, many sensible and reasonable motorists would decide to do so. That choice should be available.

Mr. Snape: I know that the Conservative party makes a song and a dance about availability and freedom of choice. The hon. Gentleman's view is unrealistic. A motorist in the position that he described will have psychologically decided to drive.
The argument that clinches the debate on the fixed link is this. Anybody with a grain, an ounce, an iota of common sense, rather than drive to a terminal at Cheriton, would prefer to load the car on to a train at a place away from the tunnel mouth, and pass the long journey in comparative comfort and safety on the train, through the Channel tunnel.
Notwithstanding the advanced technology from Japan that one of the fixed link advocates has talked about, I hope that the Government, despite their avowed dislike of commonsense solutions for transport, will opt for the only sensible cross-Channel link of the ones before them and for once will have the courage to say what Max Hastings, the well-known Left-wing journalist, said. He referred to the detestable road lobby. I hope that the Government will say "This time you are not getting your own way. We shall be sensible about our transport infrastructure." However, I believe that the French will tell them that anyway. Normally on the continent Governments are less susceptible to the wiles, blackmail and arm twisting of the road lobby than successive Governments have been in this country. I hope that the decision will be made for the Government by the French.
The only sensible solution is that of the Channel Tunnel Group. The points raised by my hon. Friend the Member for Linlithgow not only should have been discussed a long time ago and should form a part of the decision-making processes of the Department of Transport, but should provide an unanswerable reason why the only cross-Channel link that we should have is one connecting Britain with the continent by rail only.

The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell): The hon. Member for Linlithgow (Mr. Dalyell) helpfully sought to give an airing to several matters affecting the Channel fixed link, if any, and the decision that the Government have to make. I am grateful to him, for reasons that will come out during my remarks, for having initiated the debate, even at a later hour than both he and I thought it would be.
The hon. Gentleman drew attention to an experience that he had had while driving—[Interruption.]—through the Dartford tunnel. It is helpful that that was imprinted on his mind so clearly that he was able to describe it—[Interruption.] I do not think that the hon. Members for Rhondda (Mr. Rogers) and for Rother Valley (Mr. Barron)

wish me to give way, but they keep interrupting from a sedentary position. I shall give way if they wish. [Interruption.] I apologise for interrupting the hon. Members' conversation, but I was trying to answer the hon. Member for Linlithgow, who raised serious points, which the House needs to examine carefully.
The point that I was trying to make was that the hon. Gentleman's Dartford tunnel experience, which was imprinted so clearly on his recollection, is the sort of thing that we have to try to ensure is covered when we make our assessments.
The hon. Gentleman also referred to the tailback that can be found on a motorway-type road and said that one nut can create havoc. That highlights vividly why we must consider the promoters' proposals carefully.
The hon. Gentleman rightly attaches importance to driver safety. It is a key element in our assessment. We are not simply considering the type of catastrophic event which he and his hon. Friend on the Government Front Bench—

Mr. Snape: The Minister is two years too soon.

Mr. Mitchell: —the Opposition Front Bench described. We must be sure that the link is designed to cater for all conceivable conditions and incidents. It must therefore have adequate crossovers, high quality surveillance, traffic control equipment for close and constant monitoring and satisfactory contingency measures to deal with breakdowns or emergencies. The promoters' proposals are therefore being examined to see how they would cope with the three operating states.
The first hypothesis is the normal free-flowing condition, when the main need is to provide for the occasional breakdown. The second is when it is necessary for the operator to take a complete lane or carriageway out of service. That has not been mentioned, but it must be taken into account. The main need is the ability to divert traffic safely. Finally, we are considering the promoters' contingency plans to deal with emergencies. Important requirements in this regard are immediate response from rescue crews, clear and effective traffic signals and control of the ventilation system in case of fire.
Hon. Members have mentioned other aspects, which I shall ensure are drawn to the attention of our assessment teams. The drive-through schemes are being assessed critically on that basis. The Department's highway engineers, outside experts and experts from France will have to be satisfied on all of the counts that I have outlined before any road scheme could go ahead.

Mr. Dalyell: Will the findings of the assessment teams be made available to the Library for those of us who are interested? As I said in my speech, I was a little disappointed that the TRRL could not talk to the Library.

Mr. Mitchell: I give way to my hon. Friend.

Sir John Page: Are some of the teams joint British and French teams, or is it possible that the two Governments will come to dramatically different conclusions?

Mr. Mitchell: The hon. Member for Linlithgow asked about the TRRL report. We will publish a White Paper. Some of the information from the promoters, for example, is commercially confidential. The White Paper will give the House as much information as can reasonably be made available. My hon. Friend the Member for Harrow, West


(Sir J. Page) asked about the possibility of divergent views. We have 20 assessment groups, and the French have other groups covering the same issues. The two teams are in touch with each other. That does not necessarily mean that they will come to the same conclusions. So far there appears to be general consensus between the assessment groups about the risks that they have been asked to identify, consider and recommend on.
The question of driver psychology was also raised in the debate on 9 December, especially by the hon. Member for Linlithgow. That gave me the opportunity to satisfy myself that the question was being thoroughly considered in the assessments. The matter was also dealt with in the Transport Select Committee's report published on 2 December. Interestingly, the Select Committee referred to the need to be satisfied about the psychology, not only of driving through tunnels, but of loading and unloading vehicles from trains.
The promoters of the two fixed link schemes which involve drive-through tunnels have adduced evidence about driver psychology in support of their, admittedly different, schemes. Both promoters propose a range of measures to guard against any difficulty on that account. There will, for example, be permanent patrols throughout the link. Their evidence and measures are being examined closely by the assessment teams. For that work we are calling on the resources of the TRRL.
The hon. Gentleman said that the TRRL did not report direct to the Library or to hon. Members who had made inquiries. It is doing research for a client, and it is normal to report to the client—in this case the Department of Transport—and for the client to make available requested information. Certainly the hon. Gentleman's points will be kept in mind for the White Paper.
An important area in which we need to be satisfied is how the less expert non-professional driver will cope with what may be unfamiliar conditions. We need to know the answer to that question, both for safety and to determine whether the psychological effects of driving through the tunnel would affect usage and the viability of the scheme. The hon. Gentleman quoted extensively from a document which has come to me from the Channel tunnel group. I assure him that it has come into his possession, mine and that of the assessment teams. Therefore, they can take account of the points that are made.

Mr. Dalyell: I told the Minister's office that I would quote from it, as soon as I knew I was lucky in the ballot—

Mr. Mitchell: I am not complaining, but merely saying that the Channel tunnel group has sent that information, and that we have ensured that it has reached our assessors and is being covered.
The hon. Gentleman drew attention to the arguments in that document about the monotony and predictability affecting drivers, and the possibility of micro-sleep. Sometimes when hon. Members are in the House until late into the night and drive home, I am surprised that there are not more examples of that. The circumstances of the tunnel may induce boredom, lack of attention and drowsiness, and that must be considered carefully. There are ways which hon. Members have described, in particular my hon. Friend the Member for Sheffield, Hallam (Sir J. Osborn), which seek to deal with that problem. The question is whether they deal with the problem effectively.
The question of inebriated drivers has been raised, and of holidaymakers tired from long journeys. Some people drive long distances, for example across France, at the end of a holiday, flop into the ferry and are happy to put up their feet and let someone else do the work. I have no doubt that, should there be a Channel fixed link—we do not know that yet—many people will still wish to use ferries for those clear advantages.
Much more serious questions were raised by hon. Members who drew attention to the potential of fire hazards and of carbon monoxide hazards in long tunnels.

Mr. Dalyell: Rational people will use the ferries, where they can flop, but people who want to flop usually want to do it at home. Therefore, they will take the risk of using the tunnel. They will do so at the expense of others and themselves.

Mr. Mitchell: The hon. Gentleman is right to point out that danger. However, that danger also exists on our roads. The House will be well aware that tiredness slows people's reactions and helps to turn small accidents into major ones.

Mr. Rogers: Can the Minister illustrate in our roads system the comparable physical circumstances of a Channel tunnel—for example, a straight 20-mile road?

Mr. Mitchell: I am sorry that I gave way to the hon. Gentleman, because that was not the point raised by the hon. Member for West Bromwich, East (Mr. Snape). I was trying to reply seriously to his question about multiple accidents and the pile-ups that can happen even on open roads such as the M6. We shall have to consider carefully what the effects will be, not just what we should do when a tunnel is jammed and the emergency services cannot reach the scene of an accident as easily as they might reach an accident on a motorway, but whether the tunnel ventilation will be able to cope in the event of such an accident. All of those are important matters of which we are aware, and during this short debate some of there have been highlighted. We shall ensure that they are covered by our assessment teams as they consider the problems.
All tunnel schemes require special ventilation measures. The invitation to promoters made it clear that the ventilation of a road link should comply with the recommendations of the PIARC tunnels technical committee report of October 1983. The Channel expressway scheme uses two systems of ventilation in conjunction: electrostatic precipitators and longitudinal jet fans. Electrostatic precipitators have not before been used in Britain, but they have a proven record in Japan and should be an interesting concept. Their purpose is to clean diesel smoke by scrubbing out the solid particles that it contains. The additional longitudinal jet fan system is required to dilute the carbon monoxide in the air. The hon. Member for Linlithgow referred to the Dartford tunnel. He also drew attention to a letter about the matter. It is clear that we are concerned, not only with the ability of precipitators to take out diesel smoke, but with the level of carbon monoxide, and whether we can ensure that people's health will not be put at risk by driving through the tunnel.
We are examining the details of the proposals as a matter of priority. The tunnel environment will have to meet acceptable standards in carbon monoxide levels and in visibility. In particular, we need to be satisfied about the performance of these combined systems in the range


of traffic conditions, and especially their effect in dealing with fires and smoke control. Ventilation shafts are being examined by two assessment groups. The engineering group is assessing the vulnerability of the shafts to impact from shipping. The risks to shipping and the implications for the International Maritime Organisation are being considered by our marine assessment team.
My hon. Friend the Member for Hallam drew attention to the ventilation in the Channel tunnel. He described his fears about the possible risks to shipping, and we have indentified that as something at which we must look carefully.
A number of other matters were raised by other hon. Members. The hon. Member for Linlithgow raised a question about civil servants and evidence to the Select Committee. I understand that none was called to give evidence to the Committee. I shall consider releasing the advice of the TRRL in the White Paper.
The hon. Gentleman also raised the problems of vehicles that might run out of petrol, experience a failure of lights in the tunnel and so on. I am grateful to him for having raised these matters, because again this adds to the valuable way in which, both this debate and the earlier debate, hon. Members have pointed their fingers at things that we have to consider thoroughly.
My hon. Friend the Member for Hallam drew attention to the differing forecasts of the traffic and asked me to publish them. Some of that is commercially confidential imformation, but we shall publish a White Paper. I can give a provisional timetable, which involves a decision in late January, a White Paper at about the same time, with a view to a treaty being signed in February.
My hon. Friend also spoke about the gradient on the artificial islands, and I shall certainly look at that. They are large, about the size of Trafalger square, and my hon. Friend's point is important. He also described his

experience of driving through the St. Gotthard tunnel, which is about 17 km long. There is a great difference between his driving as an advanced driver and that of my elderly aunt, whom I would not encourage to take this journey.

Sir John Osborn: Surely there must be a fund of experience of good and bad drivers going through these tunnels. I hope that that experience, some of which will be coming from the Mont Blanc tunnel, will be made available to the French and British assessors.

Mr. Mitchell: My hon. Friend has drawn to my attention a point that was made by my hon. Friend the Member for Maidstone (Sir J. Wells) when he sought the Government's view on the medical aspects of drivers going through such long tunnels. We shall be drawing on the experience of the operators of Swiss and other long tunnels before we make a decision. We shall also be taking expert advice about driver behaviour in a road tunnel.
The hon. Member for West Bromwich, East said that it was odd that we should have this debate. It is not odd at all—it is helpful that the hon. Member for Linlithgow has given us the opportunity to hear more from the House. It is not odd, it is felicitous, because it has enabled me to recover from my disappointment at the absence of the hon. Member for West Bromwich, East from our proceedings when we last debated this subject. I am glad that the inhibition that kept him out of sight on that occasion has now gone.

Mr. Snape: I am grateful to the hon Gentleman. I hope to participate in many such debates—

Mr. Deputy Speaker (Mr. Ernest Armstrong): Order.

Mr. Dalyell: On a point of order, Mr. Deputy Speaker. I should just like to thank the Under-Secretary of State for the seriousness and courtesy of his reply.

Juries (Practice for Challenge)

Mr. Toby Jessel: In the debate on the Loyal Address on 7 November, in reply to an intervention from me, my right hon. Friend the Home Secretary expressed concern about the current position on peremptory challenges of jurors. He was kind enough to say that he had read the speech that I had made the previous night in the debate on the Loyal Address, in which I put the case to curtail the right of peremptory challenge of jurors in Crown courts, especially in multiple cases with several defendants, which tends to handicap the police in their efforts to deal with violent and serious crime.
Before I develop that argument, may I please make two points clear? First, in the debate on the Loyal Address on 6 November I said:
I do not blame defence counsel—they do their best for their clients within the rules. The rules are wrong, and it is up to us to change them.—[Official Report, 6 November 1985; Vol. 86, c. 92.]
That is consistent with early-day motion 152 which was tabled by my right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle), together with several other leading and distinguished parliamentarians who are also lawyers.
My right hon. and learned Friend's early-day motion says:
That this House reasserts that so long as the right of peremptory challenge to members of a jury exists then, in accordance with the traditions of an independent legal profession, it is the right and duty of defence counsel to exercise that right if he considers that it is in his client's interest to do so, or if he has received instructions from his client to do so.
I added an amendment to the effect that I agreed with that.
Secondly, I believe that it is important that juries should comprise a broad cross-section of the adult population. We do not want to replace one slant by another slant.
Next, may I remind those right hon. and hon. Members who are not lawyers of the current position. In Crown courts, there are two types of jury challenge: peremptory challenge and challenge by showing cause. Under peremptory challenge, each accused person, through his lawyer, can challenge and remove three jurymen without giving any reason whatever. Thus, in a multiple trial where there are four accused there can be 12 challenges. Where there are seven accused there can be 21 challenges. Several defence counsel, either acting singly or getting together to work out their policy, can continue to challenge and to remove jurors until they get a jury that is broadly to their liking.
There is also the right to challenge jurors by showing cause. In that case, the accused has to show good cause why a juryman or jurywoman should be removed and to justify his objections. Nobody is saying that that second right should go. I would add that in criminal cases the prosecution also has the right to both types of challenge, but so far as I am aware nobody has suggested that the prosecution systematically uses that right to challenge in order to unbalance the composition of juries. Defence counsel, however, sometimes do so.
Lord Denning has said that peremptory challenge should be abolished. He said so in another place as recently as 4 December. In his book "What Next in the Law?" the passage on this subject caused such a reaction that he resigned as Master of the Rolls and the book was

withdrawn from sale, but not before the House of Commons Library had obtained a copy. I shall now quote the relevant passage, which is headed "Packing the jury." Lord Denning wrote:
It is now becoming apparent that the accused, by using the 'peremptory' challenge, may seek to 'pack' the jury-box with jurors who are sympathetic to his side, or at any rate to get enough so that more than two will disagree. The most important case in recent times was when there was a riot in a coloured area of Bristol called St. Paul's. The police moved in to make inquiries as to illegal goings-on there, such as prostitution and the like. They were attacked by mobs of the coloured people living there. They did not like their illegal activities being stopped. There was most serious disturbance. The police were outnumbered and had to withdraw for a time. Many police were injured. Twelve of the ringleaders of the riot were arrested. They were charged on indictment with riot at common law. The panel of jurors was composed of people of Bristol, both coloured and white. On the jury being called, each one of the twelve accused used his right of 'peremptory' challenge. So there were thirty-six challenges available to the twelve. They used up thirty-five of them. It was done so as to secure as many coloured people on the jury as possible—by objecting to whites. This meant that five of the jury were coloured and seven white. The evidence against two of the accused was so strong that you would think they would be found guilty. But there was a disagreement.
Lord Denning refers to another case, and continues:
the right of 'peremptory' challenge has been used to secure for the defence a jury thought to be more sympathetic to the defence—such as long-haired youths—or timid women—according to the nature of the case. Sometimes it is used so as to object to any man who is dressed well or who looks intelligent or middle class.
This prompts the reflection: What is the justification today of the right of the accused to 'peremptory' challenges? Should we any longer permit the accused to exclude a juror simply because of his looks?

Mr. David Ashby: My hon. Friend talks about packing a jury. How can any one challenging a juror say where the juror lives, what his occupation is, what his interests are, whether he is married or single—or anything about him? If one has no such information, how can one pack a favourable jury? Is not suggesting that that can be done unworthy of those people who spend so much time on jury service for which they are low paid?

Mr. Jessel: I hope that my hon. Friend will contribute to the debate later, since he made five or six points. I cannot answer them all. However, to tell what a juror is like one must go by the average and take into account certain characteristics. As a leading article in The Times said last June:
Today the peremptory challenge seems to be used by defence counsel in an endeavour to achieve as far as possible a jury composed of people believed by the defence to be likely to be hostile to the prosecution and sympathetic to the defendant. Race, class, age, sex and education all seem to play a part in the selection process.
There is a discernible tendency to favour those who seem to be … unskilled and relatively uneducated …
The principle of random selection is fundamental to our jury system … What is now happening is that the right of challenge is being used not in order to achieve a fair and just trial but in order to defeat the principle of random selection and replace it by a partial, or in some cases a total, selection of the jury by the defendant …
If the jury system is to survive in this country, it must retain public confidence. The present abuse of the defendant's right of peremptory challenge is bringing the system into serious disrepute. This should be a matter of concern for all who care about jury trial. There is no longer any sensible justification for preserving the right of peremptory challenge, which ought now to be abolished.
I received a letter from a lady in Surrey a couple of weeks ago. She said:


I was recently a juror on a case involving the dealing and selling of heroin. The two defendants challenged five jurors, four of whom were elderly, the fifth was a very smartly dressed young man in suit and tie.
The drug squad and the police presented the fact very clearly and one of the defendants admitted that he smoked heroin and that it was found in the the squat where he and his girl friend lived. In spite of this, we were unable to return a guilty verdict.
Three youngsters on the jury were anti-authority, anti-police and in fact anti-everything to do with law and order. One said that all his friends were on drugs and he certainly wouldn't return a guilty verdict.
How can any hon. and learned Member justify that? We all know that it is wrong, that it is unjust, that it undermines the fight against violence and serious crime, that it undermines respect for the law, for the Bar and for the courts and that it must stop, and quickly. We know that it is going on and anyone who pretends that it is not or who plays down its importance is acting against the public and national interest.
I tabled an early-day motion a few weeks ago about the Cyprus secrets trial, in which I set out an account of a pretrial meeting which took place at 9·35 am on Sunday 14 April in a private room at the Old Bailey. Because that motion was long, I will not read it. It was abundantly clear that leading defence counsel in the case got together and discussed how best to obtain a jury to improve the chances of acquittal—that is, to diminish the chances of conviction. It was, no doubt, a lawful exercise, but its revelation met with a deafening silence from the Bar Council.

Sir Anthony Meyer: I do not wish to express an opinion one way or the other on the fundamentals of what my hon. Friend is saying. However, will he agree that a consequence of what amounts virtually to a selected jury may not merely be that guilty people are not found guilty but that people who are innocent walk from the court with a cloud over their heads because people will say, "The jury which found them not guilty was not a proper kind of jury."?
I am particularly concerned about that because, in the case of the Cyprus accused, one of them who was my constituent was, I am convinced, entirely innocent, and I believe that that was true of one or two of the others. They now feel that they have been acquitted by a jury about which there is some suspicion.

Mr. Jessel: I accept what my hon. Friend says, though it seems an added reason for getting rid of the peremptory challenging of jurors, or at least sharply curtailing the number of such challenges.
I should make it clear that a leading defence counsel in the Cyprus case—one of the seven—Lord Hooson, who was formerly a much-respected Member of this House, and his junior Mr. Britton were not present at the meeting to which I referred. All the other leaders were.
Challenges should be used to remove jurors who might be biased. Yet challenges are now being used systematically to introduce bias—a bias towards acquittal—and that is not fair to the public, who want to help the police deal with serious and violent crime.
The Home Secretary told me that the Crown prosecution service would look into the matter. I fear that that could take too long. The Crown prosecution service seems likely to have some teething troubles and manning and salary problems. It will not begin in London until

April and in the rest of the country until October. We do not know how long it will take over its inquiries; how long the Government will take to consider its findings; or how long the Government will need thereafter to prepare legislation, which might then get caught up in an election period. Thus, any new law might not be on the statute book before 1988 or even 1989. Three or four years is too long to wait.
The Home Secretary was kind enough to see me in his rooms on 27 November last to discuss the matter. He referred to the forthcoming White Paper, early in the new year, on next year's Criminal Justice Bill. At that time he gave no undertaking about whether there would be any reference in the White Paper to the peremptory challenge system, but he said that it might be under consideration. I understand that since then there have been discussions between different Government Departments on the matter and I hope that my hon. Friend the Minister will reflect the need for urgency when he replies.

Mr. Mark Carlisle: We will all be grateful to my hon. Friend the Member for Twickenham (Mr. Jessel) for raising this matter tonight, because it needs to be aired in the House, and I hope aired with some realism. I was delighted to hear my hon. Friend's acceptance that the use of the system that exists is not an abuse of the system by those who use it.
We are told that there is great concern about the use of the right to peremptory challenge. There is nothing new about this. The right to peremptory challenge by a defendant of members of the jury has existed for many hundreds of years. Indeed, under the Criminal Justice Act 1948 every individual defendant had the right to challenge without cause seven members of the jury. It was only in 1974 that that number was reduced to three. Throughout the years, as the Solicitor-General reminds us in a statement that he has issued, that right has been in existence, has been used and has been properly used by defence counsel on behalf of their clients.
So long as that right exists, it is the right and responsibility of defence counsel to use that right if they believe it to be in the interests of the client whom they are defending. My hon. Friend was good enough to say that he agreed with the terms of the early-day motion which I put down and which was supported by all parties. He was good enough to say that he was not suggesting that defence counsel had abused their right. But, unfortunately, he then went on to use language of the type which has led the press to suggest that counsel have behaved wrongly. He said that, when he raised the fact that counsel had objected to certain jurors in the spy case, it had been met by a deafening silence by the Bar Council. The only implication of that must be that my hon. Friend is suggesting that there was something that the Bar Council should have been inquiring into. I repeat that, so long as the right to object to jurors without cause exists, it is, in my view and I believe in the view of hon. Members and the legal profession, the right and duty of defence counsel to act in the interests of their client and to object to jurors if they are either instructed to do so or believe it is in their interest to do so.
The real issue is not the use that is made of the right at the moment but whether that right should exist. There I must confess that I share my hon. Friend's view. I am a radical on the issue. In 1970, when I was a junior


Minister in the Home Office and there was a right to seven peremptory challenges, I argued that we should not reduce that to three but should get rid of them entirely. I was overruled and those who overruled me may have been right. I take the view that the right of jury trial is a sacred right in this country and that every man has the right to be tried by his peers, but that he does not have the right to choose who those peers shall be. I question the right to peremptory challenge without cause rather than the right to challenge with cause. I appreciate, however, that that is a minority view in my profession. Most of my colleagues, whom I respect, believe that there is a case for limited use of peremptory challenge as a safety valve against an individual feeling that he is being tried by a jury which may be weighted against him. That may be right. Therefore, although I am prepared to reconsider the need for peremptory challenge at all, the matter is not so one-sided as my hon. Friend the Member for Twickenham suggests.
In ordinary cases, I do not believe in using the right to peremptory challenge. I am no psychiatrist and I do not accept that a man in a jacket and tie is necessarily more likely to convict my client than is a man wearing a sweater. Indeed, I find the suggestion offensive to the man in the sweater. In my view, it is impossible to tell from the look on a juror's face what his attitude may be. In multiple cases, however, in which there are many defendants, I accept that defence counsel will use that right to try to eliminate certain jurors if they or their clients believe, rightly or wrongly, that the jurors in question are apathetic to the case being made for the defence.
Finally, my hon. Friend the Member for Twickenham must not forget there is an equivalent right for the prosecution. Indeed, the prosecution has an unlimited right to stand aside anyone it wishes. I have no objection to reexamining the right of challenge because I personally question its validity, but if we do so it must be on the basis that we look at the rights of defence and prosecution alike. In other words, if we consider removing the limited right of the one we must also consider the unlimited right of the other.
Therefore, I say to the Minister: let us have a serious examination of the present situation if that is necessary, but let us not imagine that it is a major abuse of the legal system, because it is not. It is a limited area which may require examination—but in the light of reality and fact rather than in the heightened atmosphere of an individual case.

Sir John Page: I often think that debates of this kind, especially those which take place late at night, are of great importance because only those who are really interested in the subject bother to be here. I am grateful to my hon. Friend the Member for Twickenham (Mr. Jessel), who I hope will shortly return to the Chamber to receive his bouquet from me, for raising this important matter. I am here because I thought that, as a non-lawyer amateur, I should stand shoulder to shoulder with my hon. Friend in case that proved necessary.
I am reminded of an occasion when I spoke—rather well, I thought—on the Ecclesiastical Jurisdiction Measure. On leaving the Chamber, I was greeted in the Lobby by Lady Gammans who at that time represented Hornsey. She said, "I would like to congratulate you on your tremendous speech tonight, Jack," and I said, "Thank

you, Muriel. How kind." She replied, "I felt you were. speaking for all of us who knew nothing whatever about the subject."
Tonight I speak for the well-mown and carefully nurtured grassroots of Harrow. There is definitely concern in the country about whether there is a possible abuse of the peremptory challenge in the jury system. As my hon. Friend the Member for Twickenham will be aware, there is also a danger of what my hon. Friend the Member for Warwick and Leamington (Sir D. Smith) calls the "Alsatian syndrome". When an Alsatian dog attacks a person or child, for the following three or four weeks the newspapers are full of stories about Alsatians attacking people and there are demands for greater control of such dogs. Subsequently another fad occurs, and one never hears of the Alsatian attack again.
But that is not the case in this important aspect of our legal system. As the son of one lawyer and the father of two, I have always felt that the jury system should be preserved and is something of which we should be proud. As a pretty hard-line Conservative, I feel that there are dangers in changing, without the most careful thought, systems that have stood the test of time.
But my right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle), in a well-measured, eloquent and impartial speech, reminded us that the last time peremptory challenge was tested was in 1974, when the number was reduced from seven to three. There is something innately fair in the opportunity for challenge to be made. In the case of a single accused the challenge of three merely on visual attitudes seems to be quite successful, but in cases involving multiple accused, I wonder whether each should have an equal chance of challenging three of the jurors.
A thought that I throw into the limpid pool presided over by the Under-Secretary is that, if there is more than one accused in a multiple case, there might be good sense in reducing the numbers that could be challenged by each individual. I would like to think that never more than nine out of 12 jurors could be replaced by this challenge.

Mr. Gerald Bermingham: If all men are equal before the Crown, and if one man has a right to three challenges, how can it be argued that in a multiple defence case each man should be treated differently?

Sir John Page: I am grateful to the hon. and possibly learned Gentleman because I have been tussling with that very point this evening. If people are being jointly accused of a single crime, they may have a kind of joint attitude towards their defence—[Interruption.] The hon. Member for St. Helens, South (Mr. Bermingham) may laugh, but at least I have taken the trouble to think about the problem, and it seemed to me that that was not a bad way of getting over the hump.

Mr. Ashby: What happens if there are three people, all of whom are pleading not guilty initially and have all had their right to challenge, the jury is duly sworn, the prosecution opens, and two of them plead guilty?

Sir John Page: I am no Rumpole of the Bailey. I thought my hon. Friend the Member for Twickenham got out of answering the question rather neatly when he said that he hoped that my hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) would have the opportunity of asking the question in his speech and answering it as well.
Having suggested that there should perhaps be a limit to the number of challenges in one case, I wonder whether there is something to be said for looking at the catchment area for juries in cases where there is a major local interest in a case. It is difficult to find unbiased juries in an area where a local crime has had considerable local publicity. There is a danger in such cases of not having a completely impartial jury. An accused person has to be tried by his peers, and it is worth considering rather carefully who our peers are.

Mr. William Cash: One of the investigators in the Cyprus spy trial is a constituent of mine. He came to see me recently, and I was very disquietened by what he said. I know that there is a Government inquiry into the circumstances which led up to the trial. As far as I am aware, the accused have not participated in the inquiry.
I have great sympathy with what was said by my hon. Friends the Members for Twickenham (Mr. Jessel) and for Harrow, West (Sir J. Page), as well as by my right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle). The matter requires careful consideration, and I congratulate the Government on setting up the inquiry. The outcome should help us to arrive at a conclusion, not only as to the facts in the Cyprus case, but as to the principles on which peremptory challenge takes place.
I conclude my very brief intervention by saying that I have every intention of returning to the matter when the Government inquiry has concluded. I believe that it will lead to a very satisfactory outcome in the last resort.

Mr. David Ashby: It is important to recall the more recent history of the jury system. In the days when Sir Edward Marshall Hall made eloquent speeches in which he quoted from the Greeks and the Latins, they were addressed to juries of householders. They were well educated people who had achieved a certain status in life. We enlarged the category of people who were eligible to serve on a jury as we spread the franchise—to women, to people over 21 and then to all people over 18. I am not decrying that, but we must look at the realities. Juries can be drawn from a complete cross-section of the population—good, bad and indifferent. We may have a jury on which some of the jurors cannot read or write, or on which some of the jurors are not the most intelligent people. There is a problem in fraud cases involving complex issues and many documents if the jurors cannot read, let alone understand, the documents. That is one of the fundamental problems that we must consider.
My hon. Friend the Member for Twickenham (Mr. Jessel) has relied on anecdotal evidence with respect to a secrets trial, the details of which I understand to have been improperly leaked by some dishonourable member of the legal profession who had a duty not to disclose that information and who cannot therefore be trusted in any way. That dishonourable person gave anecdotal evidence about who decided within the meeting to take certain action with respect to the jury. Some people decided that one approach was a good idea, another group decided that another approach was a good idea, and yet another group

decided that a third approach was a good idea. My hon. Friend the Member for Twickenham is trying to say that a disgraceful action arose out of that, but it did not. As far as I can make out, the people had totally differing views on the composition of the jury. That is the fundamental problem to which my hon. Friend must address himself.
We do not know the composition of a jury. We can go on challenging until we are blue in the face, but we cannot be certain of what we are getting. That is right and proper. That is how it should be. In challenging juries, one has a right, as my hon. Friend the Member for Twickenham said, to have "a broad cross-section of the population". I have seen juries comprising 11 women and one man and have thought to myself, "That is not a broad cross-section of the public. The population is not composed 11: 1 of women. Should I use my challenge to reduce the ratio so that it is closer to the proportion in the population?' I have come across a jury composed of people of 50 or more and have said to myself, "That does not reflect the population. The jury can include people from the age of 18. Should we not have a few people on it who are between 18 and 25, or between 25 and 30?" Is that not a proper challenge to make?
One may look at the jury panel on the right and the jury panel on the left and say, "There are 10 people of 50 or more. Should I challenge three to try to get some of the younger people on to the jury?"

Mr. Jessel: Can my hon. Friend say with his hand on his heart that it is not his purpose when making those challenges to obtain a jury that will improve his client's chances of an acquittal?

Mr. Ashby: It is first of all my responsibility to do my best for my client, just as it is equally the Crown's duty to do its best for its client. The Crown has the police as clients. It is my duty to try to get a good cross-section on to the jury. With my hand on my heart I can say that, by and large, I challenge juries to obtain a good cross-section—to use my hon. Friend's words, "a broad cross-section of the population."
I speak for my colleagues at the Bar, with whom I have discussed the nonsense that has been talked about juror challenging in the past few weeks. Almost all my colleagues at the Bar take the view that it is nonsense. They have all asked, "How can we pack a jury when we do not have a clue who the jurors are? We do not know where they come from. We do not even know which part of London they come from, for example. We do not know what their views are or anything else about them."

Mr. Jessel: Why is the peremptory challenge employed?

Mr. Ashby: My colleagues at the Bar all say that some juries are not composed of a broad cross-section of the public. There are some unbalanced juries.
If I could be sure of a number of factors, I should happily give up the right of peremptory challenge. First, I look for an intelligent jury. If a barrister has a good defence, he will want to submit it to an intelligent jury. He will not want a dumb jury to listen to his defence. Secondly, I should be happy to revert to juries of householders, but that will never happen and so it should be forgotten. Thirdly, if I could be assured that a jury consisted of a good cross-section of the public, I should be happy with it. I want to know that the jury is composed


of men and women in equal numbers and that it is representative of age groups in the population and of the area. That will not be achieved by the present system, and that is why the preremptory challenge is available.
I intervened in the speech of my hon. Friend the Member for Twickenham because I wanted to pay tribute to juries. I have been involved in a case which has run for five weeks, and the jury gave up its time to hear it. Jurors are virtually unpaid, and they give up their families, work and many other things. In the five-week case in which I appeared, the jurors listened to the evidence day after day with the greatest attention, as well as to counsel's closing speeches and the summing-up. I pay tribute to jurors throughout the country for undertaking that responsibility willingly.
To talk about juries being packed, to suggest that some jurors are less worthy than others and to refer to the jury in the secrets trial as one which was incapable of coming to the right decision on the evidence, is to mount the most scurrilous attack on the integrity of honourable and decent people. I challenge my hon. Friend to name one person on the secrets trial jury who was not honourable and did not come to his decision rightly on the evidence. The jurors came to their conclusion on the evidence. My hon. Friend was not there, and neither was I.
I listened to my hon. Friend the Member for Twickenham referring to Lord Denning's anecdotal story about the Bristol riots. When a number of black persons come from a black area and they are charged with the most serious offences, is it not right and proper that they should ask, in keeping with having a broad cross-section of the population, that there should be a few coloured people on the jury? Where is our idea of justice and fairness? It is an idea that has evolved over the years. It has created a wonderful system which is the pride of our nation. It is one which we have exported, and one which is held in the highest esteem by many countries throughout the world. Where is our sense of value that we should try to denigrate something that has grown up well and honourably over the years?
The jury system is a well tried and true system; it is an honourable system; it is the best system that we can devise. We should uphold it, not denigrate it. What other country would acquit six people who had allegedly confessed to what amounted to treason? It says much for our system—and I have been proud to be a party to that system for 23 years—that that should happen in such a serious case. Indeed, the system is highly thought of by other countries.
What do people want? Do they want a system of rough justice? Do they want juries to be packed so that those who may be innocent are convicted? The tenor of the debate has been totally to misunderstand the system—that people are innocent until they are proved guilty; that each individual is to be tried and treated as an individual so that each should have the right of jury challenge; that cases should be tried separately and that evidence against persons should be judged separately. Those six people may have been on trial together, but they were not considered as a lump; each was considered separately.
I entirely disagree with the comments of my hon. Friend the Member for Twickenham. I believe that three peremptory challenges are right and proper to ensure a proper balance and a proper cross-section of the population.

Mr. Neil Thorne: I congratulate my hon. Friend the Member for Twickenham (Mr. Jessel) on raising this important issue. It should be aired in the House because, whatever hon. Members have said this evening, there is great cause for concern in the country. If there is cause for concern, the matter should be debated here. Where else would we want it to be debated? The question of peremptory challenges is a matter of some concern.
I am grateful to my hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) for explaining why the number of challenges has been reduced from seven to three. I now understand that in the old days it was householders who usually served on juries, so by and large they were people of more mature years.
There are a number of defects in our present system because we do not provide that those who have been recently convicted should be excluded from jury service. Nor do we take account of those who have been awarded suspended sentences. When the present system was introduced, suspended sentences did not exist, so we have a right to reconsider the matter. Anyone who has been convicted, has served, or been awarded, a suspended sentence of two years or more, should be excluded from jury service for life. Clearly they are not the sort of people who are likely to apply a clear mind to the matter.
That causes considerable concern. I have no objection to people aged 18 serving on juries, but several people in the lower age bracket of 18 to 25 have no interest in serving on most juries, and those who serve with them confirm that. They are only anxious to get out of the jury room as quickly as possible, which is not good for justice to be seen to be done. Therefore, people under 25 should have the right to opt out of jury service if they wish.
I should like the age limit to be pushed up because people of 65 and over could ably and willingly serve on juries. Even some judges are considered capable of working until the age of 70, so there is no reason why people up to 70 should not be allowed to serve on juries, which might help considerably.
The problem today is that so many people try to get off juries when they are put on them. Many self-employed people and others could give extremely good service on juries, but they do not have the time because they are not sufficiently rewarded for the service that they provide. That is a major handicap. Undoubtedly the people who are given a pittance for their jury service do everything they can to get out of it. That is not good for justice.
I have watched with concern the high rates of acquittals in some courts—some are as high as 75 per cent. I am in doubt whether that is because cases are brought unsatisfactorily in the first place or because the juries are not capable of considering them adequately. I fully accept that juries that have given many days, if not weeks, to considering a case, are to be thanked for their public service, but unfortunately many of the people who could contribute greatly to that work are using every opportunity to be excluded.
My hon. Friend the Member for Leicestershire, North-West was honest in his reply to my hon. Friend the Member for Twickenham when he was asked to say that he did not try to choose jurors who would help his case. Rightly, he said that he must put his client's interests first. That is fully accepted. I do not think that anybody in the House would believe that that was the wrong thing to do.


When my right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle) was challenged by my hon. Friend the Member for Twickenham about what interest the Bar Council should take, he was trying to say that the Bar Council should take an interest in the matter, from the point of view of justice being seen by the public to be done. If it felt that that was not so, it should be expressing an opinion, not allowing the problem to run on. My right hon. and learned Friend is absolutely right in his view. I fully support him in saying that peremptory challenges should be abolished. It does not stop people being challenged, but the explanation will have to be given to the judge, which is always right and proper.
My constituents have told me of their experiences. One bank manager told me that when he was called for jury service, on the first day he appeared in a blazer and grey flannel trousers, and he was objected to each time he appeared. The next day he appeared in sweater and jeans, and no objections were raised to his appearance. That seems strange. For the rest of the week he played a full part in the court.

Mr. Bermingham: Does not the hon. Gentleman accept that if one looks at any jury panel on any day, one sees people dressed in almost anything? It is almost impossible for somebody appearing on behalf of the defence or the prosecution to know anything about them from their dress. To draw conclusions because of anecdotes is to mislead the public, and indeed the House, about the reasons why objections might be obtained. Would it not be fairer to say that people appear and serve because they believe in serving? We should stop the farce of alleging that there is a devious motive in objections.

Mr. Thorne: If someone finds that his dress has a bearing on whether he is objected to, he is entitled to express such an opinion. It is also right for him to express some anxiety if he is objected to in court while wearing a collar and tie. I appreciate that a person's dress does not necessarily mean that he will deal with an accused person in a given way.

Mr. Allan Rogers: They could be bank managers.

Mr. Thorne: Indeed they could. One, a constituent, spent the rest of the week in sweater and jeans serving on the jury. My advice to bank managers who want to serve on juries is to wear sweaters and jeans.

Mr. Rogers: Would not the hon. Gentleman's argument be completely destroyed if the bank manager turned up on the first day in jeans and sweater?

Mr. Thorne: He would not have been rejected. That proves my point. My advice to people who want to do their bit is to appear in such dress if they do not want banisters to object to them. That is unfortunate.

Mr. Ashby: Will my hon. Friend please explain how he knows that his constituent would have been rejected on the first day? It is fascinating us all.

Mr. Thorne: I can only say that that was my constituent's experience. He was objected to each time he appeared in the jury box on the first day and was not objected to for the remainder of the week. We must draw our own conclusions whether he was rejected because of his dress.
This matter requires careful consideration. My hon. Friend the Member for Twickenham is right to draw it to our attention and I hope that my hon. Friend the Minister will be able to give some encouraging news that the Government have the matter under consideration and will seriously consider doing away with peremptory challenges.

Mr. Clive Soley: It was a pleasure and a relief to listen to the hon. Member for Leicestershire, North-West (Mr. Ashby) make such a spirited defence of juries. If I had not heard him, I should be getting deeply depressed by some of the speeches that I have heard today. They were not founded in fact and were insulting to many juries.
Whether intentionally or not, the hon. Member for Twickenham (Mr. Jessel) has gone a long way to undermine public confidence in the jury system by the cheap publicity that he has obtained in the handling of this case. He has done it unacceptably and he should review his method of tackling the matter.
We have heard comments from the hon. Member for Twickenham and, I am sorry to say, from the hon. Member for Ilford, South (Mr. Thorne) about the type of dress and the type of person who might be acceptable in a jury. The hon. Member for Twickenham talked about working-class people being less likely to convict.

Mr. Jessel: indicated dissent.

Mr. Soley: The hon. Member strongly implied that. He also implied that young people were less likely to convict. The hon. Gentleman should look at the evidence that is produced by the Government whom he supports. He should examine the British crime survey and other surveys, which show that the typical victim of crime is the young working-class male—young blacks as well. If any lawyer or solicitor is stupid enough to select people from working-class or black backgrounds simply because he believes that that will get his client off, he is wrong, because those people are more likely to take an authoritarian view towards people appearing in court.

Mr. Jessel: Did the hon. Gentleman hear me say almost at the beginning of my speech that I wanted to stress that a jury should be a typical cross-section and that I emphasised that I did not want to replace one slanting with another?

Mr. Soley: I heard the hon. Gentleman say that, but if he reads his comments in Hansard tomorrow he will find that he implied that working-class people and young people were likely to be anti-authoritarian and to let people off. I shall have to look carefully at his words about ethnic people, because I am not sure whether he also included them in that statement. That is wholly wrong, even according to the Government's evidence.
The hon. Gentleman could have told us that every member of the jury was vetted by the special branch. Let us have some balance. If we are to have peremptory or other challenges for the defence, we should extend them to the prosecution. If we are to have some form of vetting, let us vet both sides. My advice would be to defend the jury system, not undermine it.
The failure to get convictions in courts has nothing to do with the jury system. The Government and the hon. Gentleman are worried about the failure of their law and


order policy. They cannot face the increase in crime. In 1984, one half of all the Crown court acquittals were by judges, not by jurors. Is the hon. Gentleman saying that we should sack all the judges because they are not doing their job properly? Are they undermining the police as the juries are, according to the hon. Gentleman? Perhaps the judges are wearing the wrong clothes. Perhaps they are working class. I rather doubt it. Perhaps the hon. Gentleman had better start attacking the judges too.
In 1983 the Home Office conducted a study, and the Minister will undoubtedly advise his Back-Bench Friends on it. It found that jurors were not becoming more cynical or doubting of prosecution evidence. Indeed, I am not sure why we need the study by the Crown Prosecution Service.

Mr. Bermingham: Does my hon. Friend agree that if we were to carry out a survey of acquittals in the metropolitan area, as opposed to in the shire counties, we might find that the rate of acquittal in the shire counties was much lower? Does he further agree that that might have something to do with the quality of preparation for the cases, as in the shire counties there are professional prosecuting teams for that? One finds that the standard of preparation is better in those areas.

Mr. Soley: My hon. Friend has much more knowledge of the law than I have, and I shall take his word for that. I am sure that he is right.
The hon. Member for Twickenham is saying that he did not like the result of the Cyprus case. Therefore, he wants to change the jury system. I do not accept that. The jury system is much more important and longer lasting than one particular case, be it right or wrong. I cannot judge that, but I accept that 12 citizens can and should judge a case properly. Juries were never meant to be a rubber stamp for the Government or case-hardened judges.
Juries are there precisely because they represent the community. They are not supposed to be lawyers or to have detailed knowledge of the law, or to come into court with preconceived ideas. They are there to listen to the evidence that is put before them and to make up their minds on the rights and wrongs of the case. That is part of the democratic judicial system, which we have had for a long time, and we should go a long way to protect it.
The prosecution has the power of the state behind it. At present, the defence can rely only on appearance. It cannot even know the occupations of jurors. In Scotland, it is possible to know their occupations. Of course a defence might wish to challenge a shop manager on a jury if his client is charged with armed robbery in a shop, but he would not be challenging only on appearance. The right to challenge is exercised to obtain a different sexual balance, as the hon. Member for Leicestershire, North-West said, or a different racial balance. There is nothing wrong with that if the defence lawyer believes that the jury is out of balance.
The hon. Member for Twickenham gave the example of the lady who wrote to him about a drugs case. He should have been a little stronger and clearer in his principles when he answered that lady. The implication of the way in which he used her letter in this debate was that he would wish to exclude from the jury anyone who was in any way sympathetic to drug abuse. I have no desire to rake over the past, but the implication is that anyone who appears before a jury on a drink-driving charge would want to exclude from the jury everyone who believed that drinking

was had. Anyone opposed to drink might be seen as opposing the defendant. What sort of jury system do we want? What right do we have to challenge the attitudes and values of all the people in the jury system? I would have replied to that lady: the jury system is supposed to represent a cross-section of the community. In that community are people of different ages, sexes, ethnic backgrounds, views, attitudes, beliefs and everything else. That is what we should aim for, and that is what the right of challenge is about.
The Crown prosecution service is supposed to conduct a study, but I am not sure why we need it, in view of the 1983 Home Office study. If, according to the Home Office, there is no sign that jurors are more likely to be biased against the prosecution than they were previously, why are we asking the Crown prosecution service to study the matter? Why on earth are we asking the prosecution service of all people? That service is on the side of the prosecution, and no one has yet suggested that the Crown's rights should be restricted. It would be nice if the Crown Prosecuting Service studied the matter and decided to restrict the rights of the prosecution to challenge or vet. That would at least put some balance back into the system.
I draw to the attention of the House a few quotes from the debate which the hon. Member for Twickenham introduced in the press, when he used the press to make his case. The Solicitors' Journal, which wished to introduce hooded jurors, said:
Most effective would be gowns buttoned up to the neck and hoods similar to those worn by visitors to a hospital operating theatre when surgery is in progress.
One could add that such hoods are worn when raiding banks or by members of the paramilitary groups in Northern Ireland. The Home Office response was:
A jury ought to be a random selection of people and it would be artificial to insist on a standardised form of dress.
I wish that that response had been tougher and that the Home Office had said that such suggestions should not be considered acceptable in a sophisticated democracy. It is an insult to that democracy.
In the Sunday Telegraph, Paul Williams—who also appeared to wish to put the knife into juries—said:
Those most likely to be challenged are middle-class matrons.
That is news. I do not know whether it is the experience of the hon. Member for Leicestershire, North-West that lawyers always challenge middle-class matrons. Paul Williams continued:
they have probably themselves suffered at least one theft and are likely to be sceptical about the ludicrous alibis often presented. In the case where I played my little trick"—
he was talking of the trick that he played on the court—
it was clearly the comfortable-looking ladies who were on the top of the list of objections.
Mr. Williams is making many assumptions, but perhaps more stupidly he seems to have misunderstood the pattern of crimes. Middle-class ladies are not highly represented in the crime figures. Again, these are prejudices based on fiction, not fact.
My final quote is from the Solicitor-General. I was a little puzzled when I found myself at short notice on the Front Bench to answer this debate, because my immediate reaction was that this should be Solicitor-General business. Only when I had discovered a little more about the law did I realise that the debate involved the Home Office. I saw that the Solicitor-General is strongly in


favour of the jury system, and I give him full credit for that. In response to the hon. Member for Twickenham, he said:
The right to make a peremptory challenge of jurors without giving a reason has existed for the last 600 years. Until recently each defendant was allowed seven peremptory challenges.
He went on to refer to the 1977 Act, and said:
So long as that law remains as it is, then counsel have a right and duty to use the peremptory challenge as they conscientiously think best for the interests of their clients.
I agree with the Solicitor-General, and I hope that the Minister does as well. For one wild moment I thought that he had been sent out to have tea with the Secretary of State for Defence to work out their policies against the Government. I hope that the Minister will come out strongly in favour of what the Solicitor-General said.
There is a major law and order problem, which to a considerable extent has been created by the Government's policies. They have a disaster on their hands, but there is no way that they can use the police and manipulate them to deal with the social and economic consequences of their policies, and using the jury system as a scapegoat for defendants getting off in court will not be acceptable.
This is a serious matter, and any attempt to continue the erosion of the rights of juries is a retrograde step. We should at least be looking at a balance between the rights of the prosecution and those of the defence. If we can do that, some good will have come out of the debate.

The Parliamentary Under-Secretary of State for the Home Department (Mr. David Mellor): This has been a lively and absorbing debate and it is a genuine pleasure, notwithstanding the hour, to have the opportunity to respond to it.
The hon. Member for Hammersmith (Mr. Soley) has rightly reminded us of the sage words of my hon. and learned Friend the Solicitor-General, and in particular his remark about the antiquity of the jury challenge. From as far back as 1509 comes a statute that restricts challenges to 20 for each defendant, and we know that, in the Juries Act 1825, provision was made for a right to challenge up to 20 jurors per defendant in a case of murder or felony, and up to 35 challenges for a case of treason.
We also know that changes have been made in this century, so that in 1984 there was a reduction to seven in the number of challenges that each defendant could make without showing cause. Even then, there was pressure to abolish the right altogether, and no one must think that what my hon. Friend the Member for Twickenham (Mr. Jessel) has said is raising a new matter. He speaks as the latest in a long line of hon. Members who have expressed concern about this matter. These points were raised during the course of a debate in 1977 in which my right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle) played a leading role. As a consequence of those debates, and the concern that was expressed, the number of peremptory challenges permitted per defendant was reduced from seven to three.
It is important to begin by setting out why peremptory challenge has been permitted for so long in our law. It was very well stated by Mr. Arthur Davidson, who was then the Parliamentary Secretary, Law Officer's Department,

in the debate on the Report stage of the Criminal Law Bill in June 1977. I cannot improve upon his formulation. He said:
If someone, for whatever reason, thinks that a particular person is likely to be prejudiced against him or, for some reason, he feels that that person is not likely to give him a fair hearing, it is right that he should have the right to challenge him.
That is the basis for the peremptory challenge having been permitted. It was put very eloquently by Blackstone, one of the great creators of the English legal system. Many years ago, in justification of the system, he referred to the right to object to a person whose looks the defendant does not like. He said:
It is … a provision full of that tenderness and humanity to prisoners, for which our English laws are justly famous … As every one must be sensible, what sudden impressions and unaccountable prejudices we are apt to conceive upon the bare looks and gestures of another; and how necessary it is, that a prisoner (when put to defend his life) should have a good opinion of his jury, the want of which might totally disconcert him; the law wills not that he should be tried by any one man against whom he has conceived a prejudice, even without being able to assign a reason for such his dislike.
The point that Blackstone makes is related to the occasions when almost all felonies were capital offences. Therefore, the right to alter the character of a jury in a capital offence trial might take on a rather different perspective from the right to alter the composition of a jury in a minor matter that is before a Crown court.
May I turn to the 1977 Act and perhaps have the attention of the hon. Member for Hammersmith as I do so, because I am trying to reply to some of his points? Whether or not he agrees with the concern about peremptory challenges—the same is true of my hon. Friend the Member for Leicester. North-West (Mr. Ashby)—that concern has never been confined to one side of the House, it has a lengthy provenance and it cannot be dismissed simply as an unfair response to a particularly celebrated acquittal or, even more inappropriately, as an attack upon the jury system.
The hon. Member for Hammersmith may be interested to know that the person who played the leading role in the 1977 changes was somebody whom he would be pleased to hail as a defender of civil liberties in this country. He was a man of great experience in the law and in the Home Office, Alex Lyon, the former Member for York. In the debate he said:
it seems to be an anomaly that an accused person, or his counsel, should be able to prevent someone from going on a jury simply because, for some visual reason, he seems to the defence to be inappropriate for the particular trial … We have to ask ourselves whether in principle it is right. I have argued that it is wrong in principle.
That view, interestingly, was strongly shared by another hon. Member who is no longer a Member of this House; however, he was held in considerable respect as a lawyer of integrity, as I know that my right hon. and learned Friend the Member for Warrington, South will agree. That was Mr. Edward Lyons. In that debate he said:
It is obvious to anyone who goes to the Old Bailey that most of the peremptory challenging that goes on there is based on calculation about whether a particular juror is likely to be helpful or not to the defence.
At a later stage he said:
At the Old Bailey—although it must be said that many counsel refuse to participate in this practice—the defence appears to operate in favour of whoever is likely to be least intelligent and most anti-establishment. The very young, those without ties and those who look stupid to the challenger are not challenged. But it is expected that the middle-aged may be worried about their houses being burgled and may not be


sympathetic, and therefore it is thought best to get them off the jury. Those considerations are not proper. They are designed to achieve not a jury best able to deal with a particular case but, often, one which is least able to deal with the case.
My hon. Friend the Member for Leicestershire, North-West might not agree with that, but please let it not be said that my hon. Friend the Member for Twickenham is off on a mad frolic of his own. This case has a decent provenance and is argued by people whose experience of the law and of practice in the courts is every bit as lengthy and distinguished as that of my hon. Friend the Member for Leicestershire, North-West.
My right hon. and learned Friend the Member for Warrington, South, who in a previous incarnation was Member for Runcorn, made then a speech which reflected the points which he made today. As ever, he was right at the heart of the matter. I cannot improve on his phraseology. He said during the debate in 1977:
The principle we should work on is that the individual is entitled to he tried by 12 of his fellow citizens, but he has no right to choose who those fellow citizens should be."—[Official Report, Standing Committee E, 28 June 1977; c. 642–9.]
That is an eloquent statement of the case against the peremptory challenge; it deserves not to be satirised and not to be regarded as an attack on the jury system. It should be recognised as a strong, dignified and sensible argument when we consider the detail of our criminal justice system.
In that light, I detain the House about the Cyprus case. I do not know whether what was recounted in the document put before the House is right or wrong. One counsel apparently wanted a young, middle-aged, middle-class jury, another wanted a young, working-class jury. I am not sure what a young, middle-aged person is. It is what a sycophant would call you, Mr. Deputy Speaker. Another silk is alleged to have said:"We couldn't improve on fate." That piece of philosophy, no doubt, was worth the fee charged. Determining a person's attitude is like asking how long is a piece of string. We do not want to worry too much about that.
My right hon. and learned Friend the Solicitor-General was right. It is permissible under the rules for this to be done and counsel should not be blamed for doing what the House has said is right, after hearing the opposite arguments. If counsel chose not to exercise that right they would be blamed. But should they be put in their present position?
Anyone reading the document is bound to find it unedifying. We must question whether the practice should be allowed to continue. We must ask whether it contributes to the elevated principles upon which we pride ourselves and our criminal justice system rests. That is a proper question to ask and Government must try to answer it. That is exactly what we are trying to do.
Let us be clear that this is not an attack on the jury system. I do not blame the hon. Member for Hammersmith or my hon. Friend the Member for Leicestershire, North-West for saying that it is, because no less a person than Mr. Bernard Levin, perhaps one of the most noted polemicists, said in The Times the other day:
I find the increasing pressures on the jury system, of which this particular criticism constitutes only the latest of many, alarming and even sinister.
But surely we show our respect for the jury system by evaluating it and subjecting it to scrutiny, and particularly any aspect which might threaten the reputation and

standing of the system. We cherish it by keeping it in good running order, and that means making changes from time to time.
That is exactly what we have done. We radically changed the basis on which jurors are selected less than two decades ago. We widened the base for disqualification for people serving on juries on the basis that those with criminal records should not serve, and in this Parliament we doubled the number of people disqualified from serving on juries.

Mr. Soley: rose—

Mr. Mellor: No, only a few minutes remain and I will not give way. The hon. Gentleman overran the time by which I suggested he might finish.
The only way to achieve our aim of preserving the integrity of the system and public confidence in it is to take these issues as they arise and examine them sensibly, and that is what we are doing. The Home Secretary said in the debate on the Address that we shall be asking the Crown prosecution service to gather some factual information on the use of challenges—by the prosecution and the defence—and our research and planning unit will assist in designing the survey and the analysis of the results.
We hope that the Director of Public Prosecutions can make a start on those cases in which he is invoked now and that the Crown prosecution service, which comes into force in April in the metropolitan counties and in October in the rest of the country, will continue from there. No survey can be conclusive on all the matters that have been canvassed in this debate, but it can provide a factual base, enabling us to get away from some of the anecdotage which, while in some cases it is illuminating, can in others be misleading.
We must recognise that for those who believe that, as a matter of principle, the defendant should not be able to influence the composition of the jury, no amount of research will make any difference to what is a perfectly honourable and considered position. In 1977, by consent of the whole House, a reduction was made front seven peremptory challenges to three, without any clearly researched basis at that time. There can be no reason why, in the interim, consideration should not be given to a further reduction—from, say, three to one—without any necessity for further research on the matter. The question of an upper limit on total challenges in multihanded cases also arises, as does the position of the prosecution and their right to stand by.
I wish to make it clear that the Government have reached no settled or concluded view on this matter, and it would have been wrong for us to do so at this stage. I agree with my right hon. and learned Friend the Member for Warrington, South that this is not a major abuse but a limited area that should be looked at again. I endorse that observation and that, calmly and sensibly, is what we are doing.
No one has any interest in delay, and I assure my hon. Friend the Member for Twickenham that there will be no question of unnecessary delay. I hope that we shall arrive at a conclusion that will commend itself to the whole House on a matter which, if it is interesting enough to arouse the passions that it has aroused tonight, is certainly interesting enough for mature reflection and a considered response in due course.

City of London (Fraud)

Mr. Allan Rogers: Recent happenings in the City of London have given rise to great public concern. What strikes Labour Members so forcefully is that those happenings seem not to have been treated by the Government with the same concern or urgency. Indeed, who believes that we would be having the debate tonight if it were not for the persistence and insistence of my hon. Friends the Members for Bolsover (Mr. Skinner) and for Hackney, South and Shoreditch (Mr. Sedgemore)? I am pleased to see that they are present.
The Chancellor of the Exchequer has attempted to claim otherwise, and we heard his false claim yet again yesterday. That, of course, was graphically exposed today for its falseness. But, even if his claim were true, it should be part of the Chancellor's duty, and it should not be something extraordinary that he should come to the House and claim bleatingly that he had done his duty. His response should have been normal and ordinary.
Of course the matter that we are dealing with tonight, fraud in the City of London, is extraordinary. It is extraordinary in moral, legal, criminal, financial and social—or perhaps I should say anti-social—terms. It is extraordinary in its scale, in the number of frauds that are perpetrated, in the audacity of the frauds that are perpetrated, and, indeed, in the treachery of the frauds that are perpetrated. We should remember that frauds in the City of London are frauds against the ordinary decent people of Britain who create the wealth of the country and entrust it to the financial institutions that lie within the City of London.
Of late, the Government seem to have an obsession with standards, probably because they do not seem to have many these days. Not long ago we were listening to the leaders of the Conservative party talking about standards in society—the need for more law and order, for hanging terrorists, for birching hunt saboteurs, for flogging miners, and, as Max Hastings said:
All the other little human touches that would make British civilisation a better and a finer thing.
I am glad that the Right-wing extollers of those particular virtues have seen fit to join us, and I greet them.
The one area in which they seem to be lacking in standards is in dealing with their friends in the City of London. The Lord Chancellor and the Secretary of State for Trade and Industry have relatively recently stated that the standards of probity in the City have not declined. This is manifestly not so. Either that shows an appalling lack of judgment on their behalf or a great naivety, or probably both.
One of the things that we have to consider in the background to the frauds is the fact that the City has changed. The image that people often want to put forward these days in defence of their friends in the City of London is that it is filled with good men and true, working hard and honestly for God, Queen and country; people whose word is their bond, who meet together in their clubs or in their old boy reunions and order the world for the benefit of the others. That is the image that they would like us to accept of the City of London—a square mile of integrity and honesty. But, of course, that is a mirage.
That might well have been the position some time ago, but it is an image that bears no relationship to the modern

high technology money markets, where vast sums of money are moved and manipulated, and where the measure of success is not integrity but acquisition and greed.
We know that nowadays the City of London is a dynamic institution, in that it is constantly changing. Andrew Philips, a City solicitor, writing in The Observer on 15 December, said:
With all this, London has become an international crime haven, allowing financial racketeers from mainland Europe and the United States to continue their commodity swindles, advance fee frauds and the like unmolested. But we also have a fraud boom all of our own. Any firm you talk to will have its own in-house tale of woe. But it will probably remain under wraps. Exposing crooked employees in court is a rarity.
That is the City speaking of itself.
In the relatively superficial research that I have done for this debate I have been impressed by the scale and number of frauds perpetrated. [Interruption.] Yes, I am impressed—I came to the subject an innocent. Conservative Members may be experts on fraud, but I am new to the game. I bow to their superior knowledge of the criminal world. In my innocence, I was frightened rather than impressed by the volume and number of frauds perpetrated.
In 1981 the City of London police fraud department had 80 cases under investigation. In 1984 there were 117. New matters recorded were 536 in 1981 and 621 in 1984. In 1981 there were 35 arrests. By 1984 the figure had increased to 77. [HON. MEMBERS: "They are catching them."] Before the Conservatives draw any conclusions from those figures, let them consider the fact that there were 18 Crown court cases in 1981, and only 18 in 1984. If Members reflect on that, they will be led to certain conclusions.
The sums involved are extremely large. Andrew Philips writes:
A recent study, for example, calculates that British companies are now defrauded of £3 billion and more a year.
An informed insider reckons that the recent reinsurance frauds netted £500 million, and the City of London company fraud squad reports ever increasing numbers of ever larger financial crimes.
The Government's own Inland Revenue sings the same song. Earlier this year Lloyd's agreed to pay the Inland Revenue £42·5 million in respect of liabilities wrongfully secreted by members of Lloyd's. That was a settlement by Lloyd's to buy off the investigators. There are now 77 major fraud cases awaiting trial.
All this is further compounded by
the bizarre under-resourcing of those responsible for policing the City and bringing its malefactors to book. The Fraud Investigation Group of the DPP, for example, has a paltry qualified staff of 21. By contrast, for the last three years the Government has had 30 Specialist Claims Control Units in the DHSS comprised of 175 staff, chasing welfare chisellers",
as Conservative Members would describe them. There are only 21 investigators chasing the £3 billion, but 175 chasing the odd amounts that people might get away with under the welfare system. There is one law for the rich and another for the poor—steal £20 from the DHSS and one ends up in gaol, but steal £20 million from the City and one will end up in the Cayman Islands. That is the Conservatives' attitude to their friends in the City.

Mr. Anthony Beaumont-Dark: Will the hon. Gentleman give way?

Mr. Rogers: I want to finish, as a large number of Members want to speak tonight.
There is only ruthless severity for those whom the Government push into the ground, but for the Government's friends—the offshore dealers, the greasy manipulators, the property sharks—there is only laxity. I asked the Library today to provide details of instances of fraud on the stock exchange, the commodity markets, Lloyd's and banking. I was given a large sheaf of papers and told, "I have only gone back a short time, Mr. Rogers, as there were so many." I have with me the details of the frauds that have taken place during the past year, and any Conservative member can inspect them if he so wishes.

Mr. Patrick Nicholls: rose—

Mr. Rogers: City fraud is not a new phenomenon. The Opposition have always known that corruption has existed in the City, and it is a shame that it has not been dealt with previously, but in recent years this problem—as with all law and order problems under this Government—has exploded in size. Getting near the truth of City corruption is difficult and has been difficult. The old boy network prevented it in previous days, when it was called the guarding of institutional solidarity, and today's instant electronic manipulations make it much more difficult to detect fraud.
There has been an enormous increase in City activity. It is no longer a square mile of honesty and integrity. Reputations mean nothing to people whose God is money, who travel fast and who can easily put their money and that of others beyond the law.—[Interruption.] They are aided and encouraged by Conservative Members who mutter from sedentary positions and by the quick buck, free market amorality of this Government.
Yesterday my hon. Friend the Member for Newham, North-East (Mr. Leighton) asked the Chancellor to explain where market forces end and fraud begins. To his great shame, the Chancellor replied:
If the hon. Gentleman does not know that, he is not fit to be a Member of the House".—[Official Report, 17 December 1985; Vol. 89, c. 162.]
We could well say that of the Chancellor and of his actions over the last six to nine months. Indeed, I honestly believe that he gave that answer because, like his hon. Friends, he did not know the difference between fraud and free market forces. He does not know where one begins and the other finishes. He does not know the difference between fraud and an insatiable greed—

Mr. Tim Smith: On a point of order, Mr. Deputy Speaker. The suggestion that the Chancellor does not know the difference between what is fraud and what is not fraud is surely totally unacceptable, and I suggest that the hon. Gentleman should withdraw that remark at once.

Mr. Deputy Speaker (Mr. Ernest Armstrong): I am listening very carefully, but I have not heard any personal accusation against the Chancellor.

Mr. Rogers: I am pleased that the hon. Member for Beaconsfield (Mr. Smith) defends the Chancellor. I do not know whether he has a particular interest in doing so, but we shall have to look into that. Perhaps the hon. Gentleman does not know the difference between fraud and insatiable greed—

Mr. Richard Ottaway: On a point of order, Mr. Deputy Speaker. Is the hon. Gentleman suggesting that Conservative Members are party to some of these frauds?

Mr. Deputy Speaker: We must get on with the debate. I am listening very carefully. All hon. Members know that personal accusations are not allowed, and I have not heard any so far.

Mr. Tim Smith: Further to that point of order, Mr. Deputy Speaker. The hon. Gentleman said that I do not understand the difference between what is fraud and what is not fraud. I am not prepared to accept that, and I ask him to withdraw.

Mr. Deputy Speaker: I simply heard the hon. Member for Rhondda (Mr. Rogers) suggest that the hon. Gentleman did not understand it. He was not suggesting that the hon. Gentleman was guilty of any kind of fraud. Hon. Members should not be too sensitive. Let us get on with the debate.

Mr. Rogers: I would hate to say, "Methinks he doth protest too much". I have merely said that Conservative Members do not know the difference between fraud, an insatiable greed as practised in the City of London, and, as Andrew Philips said
a mechanistic commitment to the free market
which
is the perfect anaesthetic to moral disquiet. Some find it difficult to know where market forces stop and illegality begins. One opportunity can look very much like another, including the opportunity to escape the UK tax net. Hiding capital abroad is now widespread, as is juggling with the rules relating to tax residence and overseas earnings.
Many people in the City do not want to know the difference, and on occasions neither do some hon. Members.
In the City today, straight dealing is being sacrificed on the altar of competition. The Government, the Chancellor of the Exchequer and the leader of the Conservative party, with their hypocritical cant about moral standards, do not know the difference either.

Mr. Nicholls: rose—

Mr. Rogers: The Lord Chancellor, Lord Hailsham, stated last week:
The bottom seems to have dropped out of morality".
Yes, indeed, my Lord Chancellor, it has, and especially in your party, and especially with your Ministers. What is grossly unfair—

Mr. Deputy Speaker: Order. The hon. Gentleman must not accuse Ministers, and he certainly must not accuse the Deputy Speaker.

Mr. Rogers: I am not quite sure when we can condemn Ministers for their laxity. All I said was that the Lord Chancellor said last week:
The bottom seems to have dropped out of morality".
Some of the responses that we have had suggest that it has dropped out fairly close to home.
What is grossly unfair in this situation is that the wealth creators—the ordinary decent people in factories, mines, shops, offices, and also in the City of London—are being ripped off by the friends of the Tory party, who scuttle off to their tax havens to enjoy their illicit wealth. Considerable sums are involved, and it is no good Conservative Members scoffing at the huge sums of which the country is being defrauded.
The City of London must give a lead. It should purge itself and re-establish its reputation. Unfortunately, the Government seem not to want to come to grips with the problem, and foolishly and naively believe that a system of self-regulation is enough. I said yesterday that the


Government's proposals would be seen by many to smack of setting a thief to catch a thief. There are many unanswered questions in relation to yesterday's proposals and the Financial Services Bill which is to be published tomorrow. I should like the Minister to answer one of them.
The Parliamentary Under-Secretary of State for Trade and Industry, the hon. and learned Member for Folkestone and Hythe (Mr. Howard), who is in charge of the Financial Services Bill, is a clever young lawyer. He is evidently quite a rich one, too, for he admits to being in membership of five Lloyd's syndicates. Lloyd's is not, however, covered by his Bill. It is not, the Minister says, an appropriate vehicle. Perhaps in the reply to the debate we can be told what would be an appropriate vehicle, or when the Government intend to find an appropriate vehicle to regulate Lloyd's.
Many people would ask whether the Parliamentary Secretary is an appropriate Minister to bring in the regulation; whether he should be responsible for regulating his friends and colleagues, or his erstwhile friends and colleagues. How can Conservative Members talk about the probity of Lloyd's after recent disclosures? To argue that most other financial centres are more corrupt than the City of London, or that there have always been rotten apples in the City of London, is not an answer.
The debate is vital for the interests of Britain. The collapse of the integrity of and trust in the City of London is incalculable in relation to the economy. The debate on whether there should be self-regulation or legislative control could now well be sterile. We cannot legislate for an institution where the underlying moral foundations are crumbling. The opportunities for crime in today's financial bazaar are immense. Laws may not be enough. Perhaps nothing short of a moral reformation can prevent the City from drowning in its own excesses.

Mr. Anthony Beaumont-Dark: This is an important occasion, because it is the beginning of a debate that will continue for many months. In July 1983, in the first debate on this issue, I said that I thought that this would be one of the most important matters that we would consider. The City of London is one of those great important institutions not just for the few to make fortunes and certainly not just for the few to make illegal and immoral fortunes—it is a great earner of capital for the growth of this country.
I deprecate the grapeshot technique that is being adopted. It is not helpful. It is based not on evidence but on the belief that, if enough barrels are fired off, a crook will be hit. It is like some of the wild accusations made against the Governor of the Bank of England, my right hon. Friend the Chancellor or my hon. and learned Friend the Under-Secretary of State—the Member for Folkestone and Hythe (Mr. Howard). That is not helpful to the debate. It will not be helpful in regulating the City. It diverts attention from the fact that the changes that will occur in the City with the big bang and the financial conglomerates that will be formed will require severe regulation or there will be large-scale fraud. The stock exchange recognises that.
I mention one point that has not been mentioned in talk about people being employed to regulate fraud and to limit

the possibility of fraud. Forty-five members of the stock exchange are employed in a surveillance department, which is separate and separately administered, to look at fraud and movements in share prices—not as they are reported to them but as they come over on the screens—to ascertain whether there are illegal dealings. If there is fraud in a business where the turnover through the stock exchange alone is £350 billion, that is wrong and it should be investigated. The people charged should be sent to prison. If there is one thing that the Americans have over us, it is not the Securities and Exchange Commission itself, which is a very heavy bureaucracy, but the fact that they are faster at punishing malefactors. Since 1980 the stock exchange has conducted 278 investigations, 89 of which have resulted in information being sent to the Department of Trade and Industry, resulting in only five prosecutions. One cannot help thinking that nothing would concentrate integrity more than mounting some of these prosecutions faster and more thoroughly and meting out the right sentences.
The hon. Member for Rhondda (Mr. Rogers) made it sound as though making a profit was quasi-evil.

Mr. Rogers: No.

Mr. Beaumont-Dark: The implication was that somehow profit was evil. If there were not profits and people who wanted to use the capital structure, all our constituents would be much poorer because thousands of millions of pounds are added to this country's wealth every year—not through the malefactors but through the majority of honest people. The trade unions invest hundreds of millions of pounds each year on behalf of their members so that their members get better pensions and benefits, and it is right and proper that they should do so.
There is no doubt that the past of Lloyd's gives rise to dismay and not merely concern. The phrase "A1 at Lloyd's" has taken on a meaning that the great majority of its members would not want. It was excellent that Ian Hay Davison was appointed director-general, and it gives rise to ominous concern that the chairman of Lloyd's, Mr. Miller, who himself might be busy answering questions, or should be in due course, said in getting rid of Mr. Hay Davison that he wished to be the Prime Minister of Lloyd's. I wish to cast no reflection upon my right hon. Friend the Prime Minister—on the contrary—but we all know of the power that Prime Ministers have. I believe that the Bank of England and the Government wanted Mr. Hay Davison to be in the end the true director-general of Lloyd's, to ensure that it was run properly and not by those who, by jove, were pretty close to getting their fingers in the jar.
If a director-general is appointed to Lloyd's, it should be with the advice and consent of the Department of Trade and Industry. The Government have a presence in these matters and no Government can say that there can be entire self-regulation. It is not possible to have entire self-regulation, but it is possible to have self-regulation with the provision that there shall be a Government presence in those who are appointed to top jobs and, even more important, to those who are dis-appointed from them. The more effective people like Mr. Hay Davison are, the better for Lloyd's and the country. It strikes me that the more effective he became, the more some people wanted to get shot of him. That was bad for the City and for Lloyd's, and I think that it was bad for the Government.
I made another suggestion to my right hon. Friend the Chancellor of the Exchequer, who said, in his sweet way, that I usually meant well. I think that he meant well in saying that I meant well. I say in no patronising sense to my betters that the Department of Trade and Industry, or the Treasury, cannot say that the Bank of England is enough. These are matters that I hope we can discuss when we consider the Financial Services Bill, but the Bank of England is not enough.
My right hon. Friend the Chancellor of the Exchequer did not seem to like it yesterday—he may have been tired—when I said that no Government can wash their hands of these matters. In the end, good or bad washes up to the steps of the House. These matters are the concern of Government; if they are not, why are we discussing them now?
I still believe that taking people willy-nilly out of the City, often those of tender years, to advise and help is not enough. They will return to the big pool. I say on a subliminal basis that those who are taken from the City and who are likely to return to it are not as likely to be as even-handed as those who may come from the City and not thereafter return to it. That is why I say that it would be a good thing if about five people who have done great service and are of great probity—in spite of what has been said, the City abounds with more people of great probity that it does with villains—should be appointed advisers to the Secretary of State for Trade and Industry. It does not matter whether the advice comes from accountants, bankers or brokers. The five should be nearing the end of their business careers so that they have considerable experience of the City. They should be appointed for five to seven years, so that they are thereafter retired from the City. They should be able to call for all the evidence and all the papers, talk to anyone they wish and advise the Secretary of State that all is well. That would be a small price to pay for the Secretary of State to have his own advisory set-up—then there would be self-regulation, which, in the end, would work better.
There is certainly concern about the system, and the small number of cases always attract great publicity. But I genuinely believe that what the City does for this country is good rather than evil. It does not abound in corrupt people. One of the few sound statements of lawyers is that justice should not only be done but be seen to be done. If we get the Bill right, the country will benefit and so will the integrity of this House and the City.

Mr. Bryan Gould: The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) was right to remind us that the first of our debates on the important question of regulating the City was in July 1983. I think that he would join me in expressing a debt of gratitude to my hon. Friend the Member for Rhondda (Mr. Rogers) for giving us another opportunity to debate the issue, especially—I was about to say on the eve, but it is more appropriate to say on the morning—of publication of the Financial Services Bill. I have no doubt that the points made in this debate will be echoed in our debates over the coming months.
This debate takes place against the background—even in the foreground—of a rising tide of concern about the extent of fraud in the City. It is right to pay tribute to my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore), who has done so much

to promote this issue, to focus political attention on it, to raise the level of political interest in it and, in shoe, to put it on the front pages. The Prime Minister, the chairman of the stock exchange, the Secretary of State for Trade and Industry and many other luminaries are now queueing day by day to assure the British public and the House of Commons that they too are determined to stamp out fraud in the City. That is all to the good and we wait to see what actions will be taken to follow those brave statements.
It may be true that City fraud is the flavour of the month, as one Sunday paper put it last week, but the grounds for concern go back a long way. We should remember that it was in 1981 that Professor Gower was asked to begin his report on City fraud. After all, that report was stimulated by a rash of fraud. The Roskill committee was set up at the end of 1983 precisely because there was growing concern to get prosecutions and convictions in cases of fraud.
While my hon. Friend the member for Hackney, South and Shoreditch has made skilful use of parliamentary privilege, the strength of the case against what the City is up to at present, the strength of the case against the failure to bring people to justice, is such that we do not need the protection of parliamentary privilege. A simple statement of the facts is quite enough to explain why there is that sense of outrage, of anxiety, almost of incredulity at the fact that people who are committing crime on a massive scale have so far escaped without criminal penalty.
I need not weary the House with a catalogue that will be repeated time and again—a catalogue that inevitably starts with Lloyd's, with the frauds committed in famous cases such as the PCW syndicates. Those frauds accounted for tens of millions of pounds—one is tempted to say hundreds of millions of pounds.
The scale of the offences being committed can best be. illustrated if we remind ourselves that individual fraudsters in some of those syndicates got away with as much money as was raised worldwide by Live Aid for the starving people of Africa. One or two people at a time in Lloyd's got away with that amount of money.
People are entitled to say that something has gone very badly wrong, not just because people were able to commit offences of that magnitude, undetected, but because they committed them and escaped without even being the subject of criminal charges. That is an astonishing state of affairs.
I can run through the rest of the catalogue quickly. The stock exchange is mercifully free of major frauds, with the exception of the Halliday-Simpson case in 1982. It is making an effort to deal with fraud and concedes that there is a rash of minor fraud that it hopes it is dealing with effectively. The commodities markets have also seen cases of fraud, with people getting away with tens of millions of pounds, escaping the jurisdiction and still not being brought back to face charges. There are also the banks; my hon. Friend the Member for Hackney, South arid Shoreditch has referred incessantly to that matter. The Johnson Matthey Bankers case shows that even in the banking sector, fraud is by no means a stranger, and can reach substantial proportions.
Let us be clear that when we talk about frauds arid scandals, we are talking about real criminal offences—thefts and frauds which, in any other context, would be immediately recognised as criminal offences of the same


severity as muggings, robberies and various other criminal offences that we are more familiar with and used to dealing with.
Every pound of the hundreds of millions of pounds that have been misappropriated is money that belonged to somebody else. It is real money. That pound is just as real as the pound that the pickpocket takes from someone's pocket in Oxford street. It is sometimes instinctively felt among City people that somehow City fraud is less serious; it is not real money; somehow it has been conjured up out of thin air. It is real money, and those are real criminal offences.
We have in office a Government who have made great play of their stance on law and order. We know that in the realm of what one might call ordinary crime, the programme of law and order has been notably ineffective. There has been an explosion of crime, but at least in that area, the Government have said that they are concerned about it, are determined to devote more resources to its detection and prosecution, and are unhappy about the current situation. However, what has been largely unremarked by the Government until recently has been the greatest crime explosion—what Max Hastings called pin-stripe fraud.
It is noticeable that there has been no talk of short, sharp shocks and all sorts of other severe penalties, new resources and so on. I make it clear that I have been taking up the issue and writing to Ministers, Law Officers as well as Ministers in the Department of Trade and Industry, over the past two years. While there have been frequent expressions of concern at the fact that prosecutions have not been brought, the emphasis has always been on the great difficulties, problems and obstacles. That is not the same language as we hear about other criminal offences.
Many people will pause for a moment and ask: how is it that those insuperable problems seem to present themselves in the case of massive fraud in the City, yet in the case of social security fraud, which is no less a fraud—I am not making a distinction on that ground—they are much more minor? In those cases, there is no difficulty in bringing prosecutions and finding the resources to bring criminals before the courts.
My mind goes back two or three years to the famous instance in Oxford when hundreds of police rounded up 1,000 social security claimants, held them in detention for hours on end, grilled them and finally produced a handful of prosecutions and convictions of people who were among the most vulnerable in society, who did not have a roof over their heads. If the Government can mount such an operation against those people, we demand more effective action against City criminals.
What has been happening in the City is an affront to public opinion and to public morality. It is also very bad for the City. I think that I carry the hon. Member for Birmingham, Selly Oak with me on that. It is in the City's interests that these matters be cleaned up. It is in the City's interests that we have some prosecutions. Nothing will induce the re-establishment of that sense of integrity faster than the sight of one or two people going off for long prison sentences. It is also bad for the economy because, if we have an economy in which money is sloshing around and it is possible to make off with tens of millions of

pounds without penalty, the result is a distortion of economic activity—a diversion of resources and energies. That cannot be good for the economy.
What has gone wrong? What has produced this rising level of fraud and therefore the rising level of anxiety? The mechanisms and instruments available for detection are simply inadequate for preparing cases for prosecution. It is unrealistic to expect 21 policemen to unravel the complicated affairs, some years later, of highly skilful fraudsters. As a result of that inablility to deal with such cases, we are rapidly developing a reputation, which is now spreading worldwide—it is certainly being picked up in West Germany—as the fraud centre of the world. There have been recent press reports that the West Germans are astonished that some of their nationals have been the victims of bogus commodity dealers working in London, yet the police in the City cannot be persuaded to take any notice of those cases.
The vice-chairman of the Conservative party enlightened us again today. He has been told—he has some experience of this—that only frauds involving more than £10 million are to be investigated because the resources to consider smaller ones do not exist. If that is true—I would be the last person to suggest that there is any doubt about the veracity and accuracy of what the vice-chairman of the Conservative party says—it is a truly astonishing situation on which the Minister must comment. Perhaps he should persuade some of the Law Officers to set the record straight.
We await the Roskill committee, which might ease matters in some respects. We should be clear, however, that Roskill will help us, if at all, only if the matter has been prepared for prosecution and brought to court. There might be changes which make it easier to get convictions. We are concerned about the ease with which it is possible to detect such crimes and to enable the Director of Public Prosecutions in this case—but perhaps we should be thinking of a different prosecuting authority—to prepare a case that has a chance of success.
The second thing that has gone wrong, as shown all too clearly by Lloyd's and JMB, is that the supervisory authorities have been lax and inadequate. They are confronted with the need to exercise ex post facto supervision, so they also find it extraordinarily difficult, given the methods of supervision available to them, to monitor what is going on and to detect what has happened. All too often, by the time they discover what has gone on, the criminals have flown the roost and escaped jurisdiction. With JMB, it is clear that the Bank of England had to rely on utterly unreliable instruments. The Bank of England is entirely dependent on the audit process. The auditors, who are appointed by the shareholders of the company being audited, have a duty to report to those shareholders. They will resist any attempt to be persuaded to report to the supervisory authority.
A small step was taken in the White Paper announced yesterday, but we are still a long way from a proper system of supervision. For the Bank of England a statutory audit commission with a distinct and separate function would be required, so that there could be no conflict of interest or unwilling conscripts, and the statutory auditors would have a clear duty to blow the whistle to the supervisors when they saw that things were going wrong.
Another factor militates against any effective supervision and adequate detection of fraud; that is that the standards of disclosure among financial institutions are too


low. They lag substantially behind what is now the norm in most countries, particularly in the United States. Financial institutions simply do not publish enough information, and what is published is not sufficiently up to date to enable investors to make proper judgments. We know that the accounts for Lloyd's are sometimes five years out of date by the time they are subject to scrutiny.
The rules have hardly ever been applied to companies. Nearly 400,000 companies have not complied with their statutory obligations to submit the basic documentation to Companies house. That must be tightened up. If we are to have effective supervision, we need that information. That will become even more important in the City of the future where the maximum transparency will be at the heart of any effective provision against conflicts of interest. Unless we have that maximum transparency, and unless the City as a whole adjusts and adapts itself to that new requirement, we can kiss goodbye to any effective regulation, and expect a further rash of frauds.
The real problems have arisen, not just because there are a few crooks at the margins. Wherever large sums are handled, there will be criminals on the edges. It is important that there are rules to detect them quickly, and penalties adequate to deter them in future. But that is not the essence of what has gone wrong in the City.
What went wrong at Lloyd's, for example, was not just that one or two people introduced a few criminal practices, got caught and fled, but that the reinsurance deals, the offshore arrangements to avoid taxes and the baby syndicates were embraced by the establishment. The establishment was tainted by those practices and lost the ability to make the distinction between what was acceptable and what was not. The frauds are the most obvious symptoms of what has gone wrong in the City—the difficulty of distinguishing on any objective criterion what outside people would regard as acceptable.
That factor imposes an enormous obligation on the Government, and they must grapple with it. It is not just Lloyd's. Many people in the City still do not fully understand what is required of them now, and what will be required of them in future. Many people still do not accept the distinction between trading in a professional capacity, for which they charge fees and commissions, and trading on their own account. Too often the distinction is blurred, and conflicts of interest arise. Those problems will become worse in future when the old institutional safeguards have been swept away. The opportunities for conflicts of interest to arise will be enormous. It will not be good enough for the City to soldier on on the basis of the current practice, because the current practice is unacceptable.
For example, when British Telecom shares were issued, several aspects of the flotation were unacceptable. By implication, the Government have agreed that they were unacceptable, because they have changed the rules. In the future, the rules will preclude what happened in the case of British Telecom. When firms such as Kleinwort, Benson, which was charging the Government a large fee for advising them and helping them to fix the share price, and many other firms acting in an underwriting capacity realised that the price had been fixed too low and that an immense capital profit could be made overnight, they threw away and conveniently forgot the distinction between the role that they had undertaken to fulfil, for which they had privileged access to shares—there was no limit on the shares in which they could deal—and

their ability to deal in shares on their personal account'. There are many reports—some have been made to me—of City firms which dealt in the shares on their own account, and which gave those shares to their staff, distributed them to bonus funds, or gave them to favoured clients and friends of the firm. That is unacceptable.
One commodity firm, Rudolph Wolfe, took 1·3 million BT shares. I do not know what it did with the bulk of the shares, but it gave 20,000 to each head of department and 5,000 to each dealer. That is the confusion that leads to moral uncertainty, and I believe that it happened on a very large scale.
So far, the Government have refused to examine such cases. One case is with the Director of Public Prosecutions and another case was made public through the efforts of a journalist, but the Government have been extremely unwilling to provide the information on which we could make a proper judgement on how widespread the practice was. If the Government are to be regarded as treating the matter seriously, they must consider such cases so that we can clear the air, and so that we know that it will not happen in the future and that the Government are determined to deal with such practices.
I conclude by saying that the acid test for the Government will arise later today and in the months which follow as we consider the Financial Services Bill. It is one thing for the Government to say that they are worried about City fraud. We now need a determined and serious attempt to put in place the rules, penalties and remedies which will tackle City fraud. The Government have that opportunity, as the Minister well knows, in the Financial Services Bill to be published today.
The Bill must give the clearest possible statutory framework of rules, the clearest possible powers of enforcement, and the clearest possible remedies and penalties. If it does not, we are entitled to conclude that the Government are not serious about City fraud, that they retain their unfortunate attachment to their friends in the City which clouds their judgment. The Minister must say tonight whether the Bill will meet those criteria. If it does not, we shall give it a rough passage.
The Government say that the Bill will not embrace Lloyd's. On that basis, I presume that the Minister believes that he can handle the passage of the Bill, because it does not involve a conflict of interest, given that he is a member of Lloyd's syndicates.

Mr. Beaumont-Dark: Nonsense.

Mr. Gould: I shall ask the Minister now, and I hope that he will answer now or when he replies: if the Bill were amended so that it brought Lloyds into the regulatory framework, would he regard his membership of Lloyd's syndicates as a ground for disqualifying him from proceeding with it? If he were to answer yes, as I hope he would, he should quite logically be prepared to say that the decision whether the Bill should embrace Lloyd's should be outside his scope, for the same reason. If he is not prepared to say that, we see, in the person of the Minister, the very conflict that has been bedevilling the City in many of its operations, and which is the cause of so many of its problems.

Mr. Peter Thurnham: Is the hon. Gentleman suggesting that the previous Labour Prime Minister was incapable of making judgments on agriculture because he was also a farmer?

Mr. Gould: No, because, as the hon. Gentleman will appreciate with a moment's reflection, agriculture is a matter of public policy, and Lloyd's is the subject of a private Act, and it is a specific interest for which, if we were to legislate, we should have to use the procedure of a hybrid Bill, which is one of the arguments against doing so. That shows us that dealing with Lloyd's is different. It is not a matter of general public policy but of specific interests. As a member of a Lloyd's syndicate, the Minister is as much disqualified from dealing with Lloyd's as he would be if he were dealing in a company in which he held shares. The Minister is able to defend himself, and deny the statement if he wishes to do so.

Mr. William Cash: The hon. Gentleman spoke about hybridity. Would that not in itself be a good reason for not including Lloyd's in the Bill? If he had any reasons for wanting another Bill to deal with Lloyd's, procedures are available to deal with those questions. He has given the answer to the problem.

Mr. Gould: It is not my purpose to argue that dealing with Lloyd's would involve problems of hybridity. I simply raised that point to show that Lloyd's is not a matter of public policy but one of specific interest, and I repeat that if the Minister is a member of one Lloyd's syndicate, or more, he is in the same position as that of a director of a company that is the subject of private legislation.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard): I shall explain my position fully in my speech, but so that the House does not waste any more time on this argument, I make it clear that I am no longer a member of any syndicate at Lloyd's.

Mr. Gould: I am grateful to the Minister for that reply, and I look forward to an explanation.
This point raises general questions. Is the seriousness of purpose that the Government proclaim and profess to be matched by the provisions of the Financial Services Bill? I fear from what I have heard in advance that the Bill will not do that, and will be deficient in the clarity and directness that will be needed to regulate the City of the future and to exclude fraud as far as that is possible. If the Bill does not do that, the Government will have missed an opportunity and failed an obligation. I hope that the Minister will take that point seriously, and that during the debates on the Bill, we can persuade him to strengthen it so that it will achieve its purpose.

Mr. Tim Smith: The hon. Member for Dagenham (Mr. Gould) was right to draw attention to the fact that it was as long ago as 1981 that my right hon. Friend the Member for Shropshire, North (Mr. Biffen), as Secretary of State for Trade, asked Professor Gower to conduct his review into investor protection, in response to a number of frauds, including the Norton-Warburg scandal. It was also as long ago as 1983 that Lord Roskill was asked to look at the conduct of fraud trials. This gives the lie to the suggestion that this subject has somehow been raised by the hon. Members for Bolsover (Mr. Skinner) and for Hackney, South and Shoreditch (Mr. Sedgemore), when many right hon. and hon. Members have been concerned about the regulation of the financial services for a number of years.
We are concerned because of the growing scale of the problem. The figures speak for themselves. In 1981 the Metropolitan police and the City of London fraud squad together considered 378 cases of fraud, involving £262 million. By the end of 1984 that figure had risen to 711 cases, involving £776 million. That seems to refute Mr. Jeffrey Archer's suggestion today that they investigate only cases involving more than £10 million. If there were 711 cases involving £776 million, the average appears to be about £1 million. We know that there are a number of cases involving very large sums, but there are also quite a large number of cases involving sums smaller than £1 million. Mr. Archer's suggestion has already been denied by the police. They are obviously in a strong position to comment on these matters.
Ernst and Whinney, the firm of chartered accountants, has recently undertaken research on this issue. It conducted a survey and established that the average company loss through fraud each year—not just in financial service companies, but in business generally—was £6,100. Therefore, it is possible that the total loss each year is about £2·75 billion. Clearly, therefore, there is agreement about the scale of the problem that we face.
The hon. Member for Dagenham referred to the attitude of the public to fraud. It is not just that City people have adopted a slightly different approach to this issue compared with other categories of criminal offence. The point was well put at a recent conference on the subject by Detective Superintendent Perry of the City of London police, who said:
Unlike serious personal crimes like murder and rape and organised crimes of violence such as armed robbery, fraud cannot be called a high profile crime. Neither can it be compared with crimes which have serious personal impact like domestic burglary which has a profound effect on the victim regardless of the value of any property stolen. Indeed not only is most fraud low profile, it is even considered by many people to be 'clean', provided the victim is an organisation rather than the man in the street. In short by a combination of lack of violence or other personal loss and the fact that the aggrieved is often a large commercial organisation fraud manages to hide behind every other crime that plagues society today.
I suggest that public attitudes generally to fraud are different from public attitudes to other crimes, and this is a matter for concern. It starts at the lowest level, with cheating on expenses. It goes right the way up, from cheating on perhaps a few pence or a few pounds on an expense claim, to the multi-million pound thefts that have been discussed today.
The House has expressed concern about the level of the resources that are made available both to the police and to the Director of Public Prosecutions. There are 200 detectives in London, both in the Metropolitan police and in the City of London police, who are investigating fraud. They are clearly stretched in trying to deal with the number of cases that we know they have been asked to investigate.
The Assistant Director of Public Prosecutions, Mr. Wood, addressed a conference which I attended in the summer on this subject. He related the background and said:
When I first joined the Director of Public Prosecutions we had one man only dealing with fraud in London and in the Provinces. Prosecuting fraud cases was part of our general work. But as fraud becomes more prevalent, more international, more sophisticated we came to the conclusion that a separate division dealing with fraud in London and the Provinces was essential. Thus some ten years ago we created such a division under the control of an Assistant Director with five professional staff and non-professional support. A few years later we had to increase numbers and make two divisions, one for London and one for the


Provinces. Now with the advent of the Fraud Investigation Groups we have three divisions with a total of fifteen professional staff and three accountants. Such is the volume of work that they can barely cope and will have to be augmented.
Those figures—three accountants and 15 professional staff—speak for themselves. It is only recently that accountants have been recruited.
I have here something else that Mr. Wood had to say about the support given by accountants. He said:
We now have three accountants on our staff. When they first arrived I told them for the first few weeks they wouldn't be too busy and that until their work built up they would have time to do my tax returns. In reality after a few weeks they were busy and they are now having difficulty in keeping up. Such is their value that I cannot see how we ever managed to do without them. My tax return I regret has had to do without the benefit of an accountant's advice.
It is essential that the number of DPP staff concerned with fraud is increased substantially. We must devote resources to that.
There are other ways in which the accountancy profession can help. Voluntary methods might help, but professional, perhaps newly retired, accountants might assist. We must ensure that the resources are available.
The investigation of fraud requires special skills, as does other crime. All those involved in trying to deal with fraud are in difficulties, because fraud is so complex. Even judges have difficulty. That is why the institute to which I belong recently organised a series of seminars for High Court judges, designed to explain some of the devices used. Such seminars could be extended to instruct Department of Trade and Industry officials, fraud investigation groups, and so on.
Lawyers are used to presenting a case orally, without any support, in court. This might emerge in the Roskill report. Courts are out of date in that respect. If court procedure were modernised, and if prosecuting counsel were allowed to use audio-visual equipment to explain the complex structure of a group of companies used to perpetrate a fraud, that would be a great help to both judge and jury. I hope that the Roskill report addresses that issue.
The resources problem is both qualitative and quantitative. It is essential to have the right number of people with the right skills. As I said to the Economic Secretary the other day, it is important that investigators have the necessary powers to obtain evidence. The Police and Criminal Evidence Act, which comes into force on 1 January, might help. The real problem relates to overseas evidence and the difficulty of obtaining it. It is difficult to persuade witnesses from overseas to attend court to give evidence. There is no simple answer. The matter needs careful thought.
Reporting fraud is essential. We must distinguish between employee fraud and management fraud. Directors and management are under no obligation to report a fraud. As a result, a large proportion of employee fraud remains unreported.
My hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) said in a recent speech:
If top management set standards of personal conduct which discourage irregularities and take quick and decisive action when irregularities are brought to their notice, then fraud will have less chance to take root. But if top management are equivocal on fraud and fail to act when cases of suspected fraud are brought to their notice, dishonest employees will take advantage of the situation.
That is the present position. When employee fraud is brought to management's notice, the normal procedure is to get rid of the employee as quickly as possible and to take

no further action. Perhaps we should change the law and place an obligation on directors and managers to report fraud.
What should we do about management fraud? My hon. and learned Friend said that managers themselves could not deal with management fraud but that there was a special obligation on the auditors of companies. I agree that the auditors should report management fraud to the regulatory authorities.
There is the problem of client confidentiality, about which we have heard in the context of banking supervision, and we shall hear about it again in the context of building societies and in the context of the Financial Services Bill. Lord Benson said in a recent report that the auditor should first inform his client. There are two difficulties in that proposition, the first being to question who is the auditor's client. It is not the management of the company. The auditor's client is the shareholders of the company. That is the distinction which, I am afraid, sometimes my profession has difficulty in making. If that is the distinction, the question of confidentiality is not so important because we are talking about reporting to the shareholders, and that boils down to the public interest—reporting to the public.
The second difficulty is that if one tells one's client that one has it in mind tomorrow to arrange a meeting with the regulatory authorities about his suspected fraud, one will go to the meeting and one's client will go to Heathrow. I agree that it would be nothing less than a tip-off, so the auditor must in such circumstances report the fraud without informing his client, but that will have to be a statutory obligation.
We have heard much in the debate about self-regulation, but what the Government will propose in the Financial Services Bill will not be just self-regulation. It will be a mixture of self-regulation reinforced by a statutory framework. In the end we shall have to decide what to do if a self-regulatory organisation refuses to change its rules so that those rules are consistent with the principles set down in the Bill and the conduct of business rules published by the Securities Investment Board.
While we have not yet seen the Bill, I understand that it will say that the only sanction open to the SIB in those circumstances will be to derecognise the SRO. That is all very well, but there will have to a specific power to require an SRO to change its rules to be consistent with the conduct of business rules arid the principles in the Bill.
If, as I hope, the House agrees on that, we shall have not self-regulation, but qualified self-regulation; qualified by the fact that there will be a statutory back-up with an ability to interfere. That, in these circumstances, is only to recognise the limitations of self-regulation. Perhaps one cannot expect people to go too far, which brings me back to what I said about auditors. I do not think that we can persuade the accountancy profession to change its rules, and if we cannot do that, we must change the law—that is clearly the alternative—so that there is no doubt about the position.
It is not reasonable to leave this to self-regulation, and I hope that the Minister will consider my two proposals for ensuring that suspected fraud is reported. That is as essential as the full investigation if fraudsters are to be brought to book. We need, in summary, adequate resources, adequate powers for the investigators and an obligation on directors and auditors to report suspected fraud.

Mr. Dennis Skinner: I wish at the outset to pay tribute to my hon. Friend the Member for Rhondda (Mr. Rogers) for initiating this debate about the City, Johnson Matthey Bankers, Lloyd's, the stock exchange and the whole question of fraud. He brought to the attention of the House some interesting facts that he had obtained—not from any Marxist periodicals but from the House of Commons Library—about the amount of fraud that had gone undetected and the millions of pounds that had been lost as a result. That there is fraud has been established without doubt by my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Sedgemore) and accepted even by Conservative Members.
The City is a powerful lobby. We were discussing lobbies yesterday—little lobbies, like the Channel tunnel lobby. They are little in comparison. The Channel tunnel is a once-and-for-all project. Build the tunnel and a lot of people make money. Tory Members make a few bob on the side—£2,000. Then they move on to another lobby. But this lobby is the most powerful that gets into the House of Commons. There is no question at all about that.
The hon. Member for Beaconsfield (Mr. Smith) is part of that powerful lobby. That is why he can speak so well about the City. He knows it inside out. One just has to look in the Register of Members' Interests. He is parliamentary consultant to the National Association of Security Dealers and Investment Managers. He ought to know a bit about it. He is parliamentary consultant to the County bank. That is one of the little banks—perhaps a little bank like Johnson Matthey. I am not too sure of its size. So he is well versed in it.
One out of eight Tory Members, roughly speaking, are members of Lloyd's. That is discounting all those who are names. The Minister said that he was not a member of a syndicate, but I wonder whether he is a name. Perhaps he will tell us that. My barrister friend tells me that there is a significant difference. Perhaps he will explain it.
The power of the City finds a great presence in the House of Commons, and, for that matter, in the House of Lords as well. So is it any wonder that from time to time a few Labour Members decide that the thing smells like a sewer and that we ought to expose it?
It is at this point that we should pay a compliment to my hon. Friend the Member for Hackney, South and Shoreditch for filling in a lot of gaps. Although many of us were arguing about the state of Johnson Matthey and Lloyd's for many months, my hon. Friend managed to insert into the gaps, as a result of the meticulous methods that he used, some of the names—the pack drill. He taught us all that what we could smell in the sewer of the City was something that was more tangible by explaining in more detail exactly who was up to their neck in the Johnson Matthey fraud. More lately, as he explained in the House recently, he wanted to get the Johnson Matthey affair off his back because he was entering into the arena of Lloyd's. He has done a wonderful job on that as well.
I want to refer to what the Chancellor of the Exchequer said yesterday. When he accused some of my right hon. and hon. Friends in the previous Labour Government of not doing the greatest job of all time in the post secondary banking crisis, inadvertently, I suppose—he probably did not realise it—he was admitting fault himself. He

was saying that there was a secondary banking crisis in 1970, 1971, 1972, when the leader of the Liberal party was up to his neck in London and County Securities—

Mr. Thurnham: There was a pact.

Mr. Skinner: Yes, there was a pact all right, with the previous chairman of the 1922 Committee of the Tory party. The chairman of Keyser Ullman temporarily tried to bail out London and County Securities—I mentioned it in the House at the time—in order to try to save the leader of the Liberal party's neck. It did not work because as a result of that banking crisis and the domino effect Keyser Ullman ran into the same trouble. It is no wonder he sometimes has a job to pay his rates. That is another story.
One of the things about that banking crisis was that the banks were given a long lease and a long rein. None of the big fish was caught. We have heard how the PCW people escaped to America and Costa Rica with the money they got from Lloyd's. Gerald Kaplan, the head of London and County Securities, went off to America as well. When I asked questions in the House, my hon. Friends in the Labour Government said that they could not get hold of him because he was in America.
I had not heard of sequestration in those days. That came up during the miners' strike. It is marvellous how the Government can sequestrate all the miners' money in what I thought were rock-solid banks in Switzerland and Luxembourg. I had been led to believe that anyone who gets hold of a million or so and wants to avoid taxation just has to put it in one of those banks and no one would be able to find out anything about it. But when the NUM did the same it was not long before a Conservative official was found to drop over and break into a rock-solid bank. By using their friends in the law courts and the City, the Tories managed to sequestrate the lot. There is certainly a lesson in that for the next Labour Government. About £50 billion has gone overseas as a result of exchange controls being lifted by the Government to help the City. We should have an official sequestrator—a Minister even—acting full time to bring that money back and have it taxed in this country. Then we could build up the National Health Service, pay decent pensions, get people off the dole queues, build houses and all the rest.
Those are the double standards under which the Tories operate. The Chancellor referred yesterday to the secondary banking crisis in an attempt to chide my hon. Friends for not doing enough about it. Why did he do nothing about Johnson Matthey Bankers when the climate was worse? Everyone acknowledges that, however great and corrupt and fraudulent the secondary banking crisis was, it was not so big as the crisis today. When the Chancellor saw Johnson Matthey going down the drain, he should have done something about it, but he and his predecessor promoted a free market economy which allowed the banks to make money hand over fist through high interest rates and made the Barber boom of 1972 look insignificant in comparison. In a climate like that a decent Chancellor would have recognised that the banks were in greater peril than they were in the 1970s because there were problems abroad as well as in England.
We have been surrounded by an international debt crisis for several years and it is growing all the time. I am told that about $975 billion is owed by about 50 out of 150 countries in the world. Imagine running a shop with 150


customers and 50 of them not paying anything off their debts but still shopping. There is an international debt crisis. The International Monetary Fund went bankrupt about three months ago and had to be bailed out temporarily. The United States has a $130 billion deficit. Fancy becoming a debtor and going to the top of the first division in one fell swoop. In a financial climate like that, any Chancellor who knew what he was doing would have decided to keep an eye on the little banks in case there was another banking crisis. If there was a crisis in 1972 when the international climate was so different, just think what could happen now. The Chancellor gave the game away yesterday by linking the 1972 crisis with the problems we face today. He should have recognised that special care was needed to see exactly what was happening in the banking sector, but he did not.
Is it any wonder that Johnson Matthey lent all this money to all these curious people? It lent Sipra about £70 million, and Abdul Shamji, who owed about £20 million, occasionally saw the chairman of the Tory party and was a friend of the Prime Minister and other Tory Members. If he was friendly with all these people in the Tory Government, is it not just conceivable that someone might have known that he was borrowing all this money from the Johnson Matthey bank? That same man, Abdul Shamji, finished up in an enterprise zone in Stroud in Kent, and he did so, according to my information, before anyone else knew that it was an enterprise zone. Is it not just conceivable that he was tipped off by the Tory Government and that some members of that Government knew where his money had come from?
In such a climate, would not a responsible Chancellor of the Exchequer have said, "We had better keep an eye on the Johnson Matthey bank. It is lending to people who do not have the collateral to pay back"? When I and other hon. Members put questions to the Prime Minister in 1984–85, she said that they had to rescue Johnson Matthey because it might have an effect on the others. The private lobbying that appeared in the newspapers—attributable or otherwise—suggested that one of the reasons was that the Midland bank was in trouble.
I suppose that the Chancellor knew that the Midland bank had problems. My hon. Friend the member for Hackney, South and Shoreditch said that the rescue was wrapped up with three different problems. I managed to spot the Midland's difficulties with Crocker in America whose debt ratio suggested real problems.
With an international debt crisis, with Midland bank tottering about, and with 80 American banks last year going bankrupt, is it not just conceivable that someone in the Tory Government should have kept an eye on Johnson Matthey bank? Should not someone have asked Ronald Leigh-Pemberton—appointed by the Prime Minister because, as she put it, "He is one of us"—"By the way, are you watching Johnson Matthey bank, because we think that it is a bit dodgy? We have a crisis nationally and internationally, and we have funny borrowers who are not likely to pay back. Are you keeping an eye on it, Ronald?" [HON. MEMBERS: "He is called Robin."] As a matter of fact, that is a more Tory name. It certainly was not Christopher Robin.

Mr. Rogers: Or Robin Hood.

Mr. Skinner: It was right for my hon. Friend the Member for Hackney, South and Shoreditch to call for the resignation of the Governor of the Bank of England if he was incapable of keeping an eye on what was happening.
The Chancellor said yesterday that there would now be all these supervisors, but questions on that subject have been asked since 23 October 1984. I asked about supervision because I spotted in a journal that only one Bank of England employee was watching countless banks in Britain to see whether they were doing their job. When I asked that question, it was shrugged to one side.
Now the Government have decided to have some sort of supervision. So the Chancellor of the Exchequer has been negligent throughout the whole affair. Those who called for his resignation—my hon. Friend the Member for Hackney, South and Shoreditch, myself and others—were right to do so, because the Chancellor was not keeping his eye on the ball.
What can we expect, anyway? If the Government decide to run a free market economy and to let interest rates go into double figures for about six years non-stop, sometimes at 17 per cent.—banks can make money hand over fist when interest rates are that high—is it any wonder that there has to be a day of reckoning eventually? It cannot be allowed to go on for ever. In that scenario, with the Johnson Matthey bank bubbling away, the Chancellor should have seen the warning signs. That is why we do not believe him when he says that he knew nothing about the crisis.
Consider the bizarre rescue. Imagine what happened on 30 September. Imagine the telephone call when the Chancellor of the Exchequer says to the Prime Minister, "It's uneconomic." She says, "Shut it, then." It in the middle of the pit strike. The Chancellor says, "But it's a bank, Prime Minister". "Oh", says the Prime Minister., "keep it open if it's a bank. I thought it was a pit". That is roughly what happened.
The Prime Minister has the philosophy that a company must make a profit or die, but that philosophy does not apply to the casino economy, or when the Government's own friends are at risk, or when it is their people's money. If it is a little firm in the Rhondda valley or in Hackney, all the pleading by Labour Members to save 150 jobs falls on deaf ears with this Government, this Prime Minister. this Chancellor of the Exchequer and this chairman of the Tory party. It has to make a profit or go under, like all those miners who were chucked out of work.
The Government have double standards. A different law is applied to banks. They can be bailed out. There is no monetarist policy then, no free for all, no "Stand on your own two feet". At that point the Tory Government say, "Bail them out, and the use taxpayers' money if necessary to do it"—taxpayers' money that should be spent in areas such as Newcastle, where there is mass unemployment.
The debate is important because it shows the Tory party's morality in relation to the industrial economy and to the casino economy, Johnson Matthey, Lloyd's, the stock exchange, or anywhere that the Tory party's people proliferate, with the most powerful lobby in this building.
Imagine the scene, with all the people waddling up Threadneedle street, called by the Governor of the Bank of England to bail out Johnson Matthey Bankers. I wrote to the Prime Minister asking why all the shareholders were not allowed to go to the meeting. Only those who could be contacted at the time were called to the meeting. Why


was there no ballot? All the talk in the autumn of 1984 was about having a ballot of miners. There was no ballot for the shareholders. Instead there was what is called an aggregate meeting. There they were, with their little square briefcases on a Sunday night. Just imagine 200 people going up Threadneedle street at midnight on a Sunday. They were not stopped at Dartford tunnel. The police knew that they were on a special journey—to bail out a segment of the Tories' beloved economy. There were different rules for them—one law for the banks and another for the rest.
There is another aspect of the case that has not been covered adequately. Why was not the parent company made to look after its errant child? Johnson Matthey plc spawned Johnson Matthey Bankers. The Prime Minister talks about the family; about parents having to look after the children when they go wrong. Yet when Johnson Matthey plc found that its bank was going under, what happened? The Tory Government sent in the social workers to look after the brat. They used taxpayers money to bail it out. Completely different standards were applied to the bank.
Why was Charter Consolidated, a major shareholder in the company, not told, "You have a bank that is bankrupt. We ask you to put your money where your mouth is"? But Charter Consolidated conned the Government and Anglo-American. The bank was saved while 20,000 bankruptcies occurred in Britain that year.
To top it off, according to the information available at the time, when the rest of the City people were asked to put in money to save the Johnson Matthey bank, some of the city financiers said, "We think that Charter Consolidated should bear more of the burden than it has. We are not happy about putting some of our money in. We might be putting more good money after bad." They were tipped off that they would be looked after by the tax authorities.
I sent another letter to the Prime Minister asking why those City financiers and institutions were given the nod and the wink and told that, if they put their money into saving the Johnson Matthey bank, along with the £100 million from the taxpayers, they could write off every penny against taxes in case they became bad debts.
It would be wonderful if the parents of the 4 million people on the dole could set off tax relief to look after the 20-year-olds who have never had a job. Different standards are applied to them.
Yesterday, the Chancellor launched a violent attack on my hon. Friend the Member for Hackney, South and Shoreditch because of his questioning in past months. The right hon. Gentleman tried to imply that we had come across this information in July after he had made his statement. It is on the record that several Opposition Members had been raising the matter since the bank collapsed. On 11 November 1984, I asked the Attorney-General, who said that he was concerned about the level of crime in the City, to send in the fraud squad. He refused. The Chancellor is wrong to suggest that we have not argued about this case for long enough.
The fraud squad did not find the crooks in London and County Securities or in Keyser Ullman, although the crooks were staring them in the face. It did not find them in all the other secondary banks. Almost no one was tackled when Crown Agents went under. The fraud squad

was sent in eight months after I had asked that question in November. I am not naive enough to suppose that the fraud squad is capable of catching someone who has been given eight months' start. The Government did not give the miners eight months' start when they were engaged in their battle to save their jobs.
Now the Government have the cheek to talk about self-regulation for the City. It means keeping it in the family for banks, for Lloyd's and for the stock exchange. Yet, during the past six years, the Government have said to the trade unions, "No self-regulation for you. We shall tell you not only how to organise yourself but you must conduct ballots when we say so. You must ballot to elect all your executives." Why do not the Government start on Lloyd's? Why not have a few ballots in Lloyd's and in the stock exchange?

Mr. Tim Smith: They have ballots.

Mr. Skinner: I know that they have ballots. They fancy ballots as well.

Mr. Smith: rose—

Mr. Rogers: Why not give way to the banking consultant?

Mr. Skinner: The banking consultant—the hon. Member for Beaconsfield—knows.
There is no self-regulation for local government. It would be wonderful if we returned to the self-regulatory system of local government which would enable local authorities to levy a rate to provide services for those in the inner cities and elsewhere. There is a difference between the inner cities and the City of London, where self-regulation is the order of the day.
There is no self-regulation for teachers. Teachers would argue that they could carry out their own appraisal, but the Government say, "You cannot have self-regulation. We will regulate for you. We will decide which grades you should be in."
When it comes to auditors investigating the affairs of Johnson Matthey and others, the result is a clean bill of health. Lambeth and Liverpool councils and several other authorities did not levy a rate for a few weeks and the Government sent in the auditors post haste to try to drive councillors out of office.
The Chancellor of the Exchequer has brought in new measures. We are to have bank supervisors. Why does he not allow the supervisors to confer with the auditors to ensure that everything is intact? Why does he not have an inspectorate? There is an inspectorate in the United States which controls about 14,000 banks. Why cannot we have an inspectorate instead of allowing self-regulation to continue?
The Government have a policy for the casino economy and one for those who work in industry and local government. Market forces and monetarism operate for the banks as long as they are making money. The moment that they run into trouble, the Government are there to bail them out. It is the job of Labour Members to expose these double standards when we see them. There has not been enough of that.
We have been under attack for the past six years. We have tried to defend our friends in the trade unions and local government while others have been making money hand over fist—[Interruption.] Tory Members like the hon. Member for Beaconsfield, who keeps chirping from


a sedentary position, have been making money out of the system. They have been lining their pockets while the Government have been attacking councils, cutting grants and attacking trade unions, the teachers and working people generally. At the same time, millions have been made by others.
It is no good saying that it is only those outside the House who have made money. We know that one in eight Tory Members are members of Lloyd's. At the latest count, 400 consultancies are divided by about 230 Tory Members. It is difficult to keep up with the Register of Members' Interests, for they are coming on it that fast.
Against a background of neglect, I agree with those who have called for the sacking of the Governor of the Bank of England. Heads should roll when there is fraud on such a scale and when the taxpayer is having to find the money to bail out the City. Of course, there should be a pubic inquiry into the cesspool at Lloyd's and into the Johnson Matthey bank failure and its rescue by the British people. That must be said over and over again. If the Tory Government will not do that, the Chancellor of the Exchequer should pack up and go.

Mr. Richard Ottaway: I join others in congratulating the hon. Member for Rhondda (Mr. Rogers) on giving us a chance to respond to an important debate which has been going on for some months. My right hon. and hon. Friends have not had a chance to put in our two-penny worth.
As we have witnessed the rather dramatic learning curve of the Opposition on fraud in the City, there have been a number of opportunities for Opposition Members to say what they feel. I raised the matter in a debate in February, and we then had the debate on the White Paper on financial services, during which Opposition Members were strangely silent. Since those debates, there have been a number of developments. We have had the conference in Geneva of the United Nations committee for trade development on international and maritime fraud, the revelations in the "Panorama" programme of a few weeks ago and the publication of the Lloyd's disciplinary proceedings, which I believe is the first sign that the Lloyd's Act 1982 is working properly.
Above all, we have had the revelations from the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore). I think that the hon. Gentleman has done three things, apart from demonstrating the fine art of the early-day motion, which he used to promote his cause. First, he made accusations of fraud in the City. I have no idea whether those accusations are true. If he has concrete evidence, I hope that he will not hesitate to pass it on to the fraud squad—

Mr. Brian Sedgemore: The latest bundle in the possession of the fraud squad comes direct from Johnson Matthey Bankers. I have it in my hand; it reached me only today. It was given to the fraud squad only because I asked the company secretary to authorise its release.

Mr. Ottaway: I am delighted to hear that. I am not criticising the hon. Gentleman. I only said that I hoped he would pass on any evidence. The hon. Member for Dagenham (Mr. Gould), if my ears heard him right, made

the remarkable comment that Kleinwort Benson was a party to fraud in the British Telecom share issue. I hope that he will pass that information on to the fraud squad.

Mr. Gould: I think that it has been accepted by the Treasury Bench and Ministers at the Department of Trade and Industry that Kleinwort Benson, which was dealing with the matter and charging the Government a substantial sum for giving them advice, was itself dealing in the shares. That is an incontrovertible fact, and that is accepted on all sides.

Mr. Ottaway: If the hon. Gentleman makes such accusations, I hope that he will pass evidence to the appropriate quarters.

Mr. Gould: The hon. Gentleman is clearly astonished, as, indeed, am I, that such conduct has been passed by the Government almost without comment. The Government simply say that they can see nothing wrong with this. All that they have done is to advise merchant barkers in similar positions not to behave in that way. I believe, as clearly the hon. Gentleman believes, that that was a clear case of, at best, an undesirable conflict of interest, and, at worst, something that approached fraud. If he is with me in that, I hope that he will join me in putting pressure on the Treasury Bench to ensure that people committing such an offence are brought to book.

Mr. Ottaway: I thank the hon. Gentleman for explaining that. I accept that he is not making allegations of fraud. I am as concerned as he is about this matter, which I was not aware of previously.
I make no apologies for the fact that I work in the City. I daily move around the place, and I must tell the House that 99·9 per cent. of those whom we meet in the City, who travel on the commuter trains each morning and evening, have absolutely no idea of how to carry out fraud even if they wanted to do so. They are performing a useful function, which is to earn invisible exports for this country. What we are talking about are an irresponsible few who are not necessarily British. Many of the criticisms of Opposition Members are causing more harm to the City than that criticism merits, especially bearing in mind the sterling earning capacity of the City.
The second thing that the hon. Member for Hackney, South and Shoreditch has apparently done is to galvanise the Government into action. As someone who has been campaigning for action on this front, I welcome the hon. Gentleman to the club of those trying to achieve more movement.
The third thing that the hon. Gentleman has done is to highlight a rather important defect in the law—and that is the grey area of what is a civil and what is a criminal matter. During the debate on the Queen's Speech, when he managed to slip in that subject during the foreign affairs debate, the hon. Gentleman gave an example of someone pinching 80p from a barrow in Hackney, who would then be chased by two policemen and prosecuted. The difficulty is that if that person, rather than stealing the 80p, said to the barrow owner, "Will you lend me 80p?", knowing that there was no intention to return it, the question arises whether that is a criminal offence or whether the barrow owner should sue that person for the return of the 80p. That is one of the main problems with what is happening in the City. It is the confusion over what is a civil case and what is a criminal case.
The hon. Gentleman may know about the Chartwell affair, when Mr. Bruckman sold shares that he did not own. The fraud squad investigated, and it was confused about whether it was a criminal or civil case. While the confusion was reigning, Mr. Bruckman disappeared.
On this topic, the Opposition are short on remedies. The Government have instigated the fraud investigation group, initiated the inquiry and review of fraud trials by Lord Justice Roskill and instigated the Green Paper on extradition. Above all, as many hon. Members have mentioned, we have had the debate on the White Paper on financial services.
I do not know whether this will come out in the Financial Services Bill, but the White Paper says that the key to enforcement in the City is having self-regulation underpinned by criminal sanctions. The Attorney-General admits that fraud is growing in the City, and the director of the International Maritime Bureau says that it is running at $10 billion a year. I find that figure exaggerated, as it is staggering. We must ask ourselves whether self-regulation is sufficient, whether those doing the underpinning have sufficient support and resources, and whether the criminal sanctions are effective.
Lloyd's is the best example of self-regulation. It is understandable that some hon. Members are concerned. Mr. Cameron Webb did not feature in the disciplinary proceedings by the simple trick of resigning from Lloyd's, so he did not come under scrutiny. He disappeared to Spain, and as soon as we signed an extradition treaty with Spain, he slipped off to California. The Director of Public Prosecutions says that we do not have enough evidence to bring him back from California. I say to him that we should go out and get the evidence. It is available. We also have Peter Dixon, who was fined £1 million. It is a fat lot of use fining a man £1 million if he is living in Marbella at the time. We must get him back from Marbella.
Self-regulation can work only if there is no conflict between the regulators and the market. The other day Mr. Posgate, who probably knows his way around Lloyd's better than most people, said that business was being transferred to preferred syndicates and that members of the council of Lloyd's were members of the preferred syndicates. I have no idea whether that is true, but I hope that it is being investigated by Lloyd's.
When syndicates crash, we come back to the point that I raised earlier—is it a criminal or a civil matter? We read in the papers this morning of offers being made to some of the innocent victims of the crash at Lloyd's. That seems to show that some people say that it is a civil matter, because if it was not they could be suing for their money. Yet others say that it is a criminal matter. That distinction must be examined.
Let us consider self-regulation on the stock exchange. We all know that insider dealing is illegal, yet about 65 per cent. of all price movements before a major announcement occur as a result of insider dealing. The figure from the stock exchange is that four people have been prosecuted. In the unit trust world, we look at the cases of late booking. When people make transactions, instead of committing themselves to where the transaction is being placed, they put in a suspense account. I believed that M and G, of all people, was above suspicion. It looks after my investments. When it was discovered that

someone in M and G had operated a suspense account, it had no records. That is disgraceful. The stock exchange confirmed that it had no rules to deal with late booking.
Despite those difficulties, self-regulation has to work. If the City of London cannot work on self-regulation, we might as well pack up and go home. We cannot have policemen sitting around Lloyd's and the stock exchange. The Government must get to grips with giving the self-regulators more power and effectiveness. As my hon. Friend the Member for Beaconsfield (Mr. Smith) said, auditors must be given more power to report suspicious circumstances. We must ensure that the criminal sanctions underpinning self-regulation bite, and are seen to bite. There must be a massive boost in the staff of the DPP, and the fraud squad must be expanded.
I do not know whether any hon. Member present has tried lodging a complaint with the fraud squad. I tried about four years ago, and was told to visit a man in a room in Holborn called the caller sergeant. The chap came out with his note pad and pencil, which he sharpened, and took down a little statement and went away again. About three weeks later I received a letter. I had given the circumstances of the fraud and the name and address of the person I suggested had committed it. The letter said that the fraud squad could not prosecute because someone would have to go to Yugoslavia to take a statement and it did not have the money to do that.
The City of London is the financial centre of the world. It must have the respect of investors, and we must give the fraud squad the tools to police it. We must ask ourselves whether the law can cope with what is going on. At the moment, the answer is no. We can make improvements with jurisdiction and with extradition. There is a glaring loophole in the law of jurisdiction. Any two people can conspire to commit a crime overseas, but it is not an offence. If the crime is carried out in, for example, Turkey, with which we have no extradition treaty, it is possible to publish details in the papers and not be prosecuted, because no offence has been committed. When I asked Lord Justice Roskill whether he was looking into that in his inquiry, he said that he was not. It is easy to understand why people say that Britain is becoming a haven for overseas criminals. People can operate without fear of prosecution.
The Home Office has produced a Green Paper on extradition. I am disturbed by some of the trailers about what will happen to the law on extradition. I understand that the prima facie rule will be abolished. That is disturbing, and I hope that we shall have a chance to discuss it. It is vital that the Home Office proposals on extradition are brought forward and that we consider with whom we have extradition treaties.
We should have multilateral treaties. We should sign the European convention on extradition. Britain and Malta are the only countries in Europe which have not signed that convention. We run into most trouble with the number of Government Departments with which hon. Members must deal when approaching this subject. In matters of jurisdiction, we are referred to the Home Office. Financial services are the province of the Department of Trade and Industry. Fraud trials take us back to the Law Officers. The rules of extradition are matters for the Home Office, but extradition relations are matters for the Foreign Office. If we want to talk about the DPP, we must go to the Law Officers again, but, oddest of all, if there is fraud on a ship


—if there is marine fraud—we are referred to the Department of Transport. If ever there was a classic example of a case for a Ministry of Justice, this is it.
There is no central drive in Government policy on this topic. The problem is international and requires art international solution. That has been recognised by the United Nations committee on trade and development, which is the only organisation that has got to grips with the internationalism of the problem. It is alone in proposing a convention on jurisdiction and extradition. When I referred that venture to the Department of Transport, which for some reason is dealing with the matter, it said that the proposals contained no practical solutions.
The Government are acting, but there is no co-ordination and no direction. Only this afternoon the International Maritime Bureau told me about a fraud involving some $2·3 million. The perpetrator is believed to have carried out a similar crime seven times in the past. We are not chasing burglars and leaving more men on the beat. We are up against sophisticated criminals. Until we are as sophisticated as they are, they will run rings round us until the cows come home.

Mr. Brian Sedgemore: I congratulate my hon. Friend the Member for Rhondda (Mr. Rogers) on choosing this subject and opening the debate so lucidly.
The huge increase in City fraud has brought the Government near to panic. They say that they are anxious to deal with fraud, but one of their main anxieties is that fraud is about to become electorally and politically embarrassing for them. Only today I was talking to a fraud squad officer who said that the Government had promised them 25 accountants. Where are they? The fact that they have not been provided is a reason why so few people who commit fraud get caught. Despite the rhetoric and the fact that there have been years of fraud at Lloyd's and Johnson Matthey bank, not one person has been arrested, charged, or is facing trial.
Mahmud Sipra is in Karachi laughing his socks off. Michael Hepker is amazed that he is still the chairnan of a public company in Leeds. Abdul Shamji genuinely believes that he can still buy his knighthood from the Government. Peter Cameron Webb is spending the loot in Miami. John Walrock can be seen in a sauna bath at the Mandarin hotel in Hong Kong. Peter Dixon is sunning himself on a sun-kissed beach in the southern hemisphere. The greatest fraud supremo of all from JMB, Mr Ian Fraser, believes that the Governor of the Bank of England, Mr. Robin Leigh-Pemberton, will give him a job on the banking supervision board.
It is absurd that those major criminals are scattered round the world, and there is no chance that any of them, except perhaps Mr. Fraser, will be charged. The Minister and the Law Officers should tell us why. They created an enormous red herring over Lloyd's by saying that they could not catch those people because they could not get the internal transcript of the Lloyd's proceedings. The Lloyd's solicitor, Mr. William Beckett, agrees that that is a red herring. I saw him on Friday. If those people are to be caught on the basis of evidence given to Lloyd's, the police must go to the same people and get the same

statements. They cannot use the statements that were given to Lloyd's. The police have not done that, and until they do so those people will go free.
The second excuse is that we cannot extradite those people. Why cannot we extradite John Walrock from Hong Kong? Only a few months ago when he came to give evidence to Lloyd's, why was there no warrant for his arrest? Was he told that there was some form of immunity to prevent him from being arrested? It is an enormous puzzle why not one warrant has been issued for their arrest and why no one has been charged. Those papers have been with the Director of Public Prosecutions since 1982. But for the fact that I started to kick up a stink about Lloyd's five weeks ago, we would have heard nothing more about it. Those papers would have been left with the DPP for a further year and still no warrant would be issued, no charge would be made, and no one would face a criminal trial.
When I first began to hear about the details of JMB, I said to myself, "Come on, Sedgemore, you are going potty. It really cannot be like that. It is an enormous fantasy or some terrifying nightmare." I have made no claims of making the running on fraud. If other people want to claim that, it is up to them. I started—Ministers cannot take this away from me—painstakingly to stitch together pieces of evidence over a long period and to get a picture of what was happening. We did not get that picture from the fraud squad, from the Chancellor of the Exchequer, from any member of the Government or from the newspapers. We got it because I asked a few people to help me with inquiries to get a broad picture of v. hat was happening.
But there seems to be almost no limit to what some of the people who have been involved in those frauds will do. The most startling thing happened about three weeks ago. Mr. Abdul Shamji, who believes that there is no one he cannot buy, tried to buy me. It was extraordinary. He contacted someone whom he knew was in contact with me—an informant—and arranged to meet him at the Pavilion bar in Grosvenor House in Park lane. First, he tried to buy that person by saying that he should try to obtain confidential documents from me, and then he put forward a proposal which amounted to an attempt to buy me.
Who is Mr. Abdul Shamji? He has a perfectly proper relationship with the chairman of the Conservative party. There is no fraud involved; it is a normal relationship. There is a bit of minor entertainment, a couple of tickets at the Garrick, and tea at Park lane. He gives money to the Conservative party from his Gomba companies, via McAlpines, and he was a vice-president of the Small Business Bureau, which is located at Conservative party central office. But what happened when my hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) said to the chairman of the Conservative party, "Mr. Shamji is a blatantly dishonest person and you should watch him"? The chairman of the Conservative party lost his temper and has refused to speak to my hon. Friend since. That illustrates the problems mentioned by my hon. Friends the Members for Dagenham (Mr. Gould) and for Bolsover (Mr. Skinner). There is too close a relationship between the Conservative party and the people involved in the City. It is not that Ministers are fraudulent or that they are in any way involved in fraud. There is an unhealthy relationship, and they do not appear to recognise its inherent dangers.
I wish to talk about Lloyd's tonight, because, of the two scandals, it is by far the biggest. It is the issue that we shall be discussing in the House during the next few months. Lloyd's will be issuing a pack later today, and it will arrive with some Government propaganda, following the publication of the Financial Services Bill. The purport of that propaganda or publicity pack is to say that there has been no fraud at Lloyd's since the 1982 Act was passed. That is another Lloyd's and Conservative party mirage. It is not a claim by me; it is a simple statement of fact that after the passing of the Lloyd's Act fraud continued in the Peter Cameron Webb syndicate. After the passing of the Lloyd's Act, fraud continued in the Alexander Howden syndicate. After the passing of the Lloyd's Act, fraud continued at Brooks and Dooley. After the passing of the Lloyd's Act, a series of fundamental questions hangs over the operations of the former chairman of Lloyd's, Sir Peter Green, and his relationship with Cresvale Securities and his further relationship with Janeen Services.
It is not true to say that there has been no fraud since the passing of the Lloyd's Act. Indeed, I do not know why some people wish to stand so heavily on the Act, since people like Mr. Kenneth Grob and Mr. John Walrock, who are two well-known criminals out of the jurisdiction, were the people who came to the House and told that Committee, which included some of my hon. Friends, that they were honest, decent, god-fearing people and that we could put our trust in them. We could not put our trust in them, and we cannot put our trust in the Lloyd's Act.
I talk to many people in Lloyd's now. They not only write to me in large numbers but come to see me, or I go to see them. Almost all of them are saying that they cannot expect Parliament or Lloyd's to satisfy them by what they do to clean up the Act unless they can be sure that there will be a clean out at the top of Lloyd's. They say that there are serious question marks hanging over the top people at Lloyd's and, in particular, Sir Peter Green, the past chairman of Lloyd's. They are all asking why there has not been an inquiry about Lloyd's—an open, proper, decent scrutiny of the activities of Sir Peter Green at Lloyd's. Why is there so much mystery about his activities?
The questions are asked about a number of sectors. First, they are about a number of syndicates that Sir Peter Green ran. I have read shoals of papers on this subject, and they contain serious questions about the operation of his Imperial and Cayman Islands Offshore Reinsurance company that have never been answered, although they should have been answered by now. I know that in November 1982 Sir Peter Green was questioned by the council of Lloyd's at Leeds castle, in Kent. He told the council that his farm was a beneficiary of the company. He tried to sell his interests, but he could not, and he put them into a trust. He has had to admit that his farm is still a potential beneficiary of the trust. Why have we not heard more about that?
Why has there been no investigation into the questions asked about whether the names are being deprived of money in relation to Cresvale Securities and its related companies, which have been mentioned in an early-day motion of mine? Why has there not been an inquiry into the relationship between Sir Peter Green and Janeen Services, one of his companies? The company looks as though it may be one of the methods by which names are being deprived of money.
What did Sir Peter Green do to help to cover up for Peter Cameron Webb? It is as clear as a pikestaff to anyone who understands simple morality that he did so. If the chairman of Lloyd's can do that so that Peter Cameron Webb was not subjected to scrutiny how can any hon. Member be asked to put his trust in Lloyd's? We know for a fact that Peter Cameron Webb was allowed to resign from Lloyd's with a month's notice, when six months is the required period for notice. That restriction of time prevented the freezing of his assets. Why did Peter Green allow that to happen? Why did he turn up in Hong Kong this year, just before John Walrock came over here and threatened to blow the gaff by giving his evidence on Lloyd's in public? Why did he suddenly change his mind at the last moment?
Sir Peter Green was asked to look into Peter Cameron Webb's Unimar slush fund. Everybody at Lloyd's refers to it as a slush fund. It is not one of the biggest slush funds at about £500,000, but it is a lot of money to go into a Monte Carlo slush fund. How could the chairman of Lloyd's, having inquired into it privately and off the record, gone back to the council without a written report and simply say that he was satisfied that nothing was wrong with the Unimar slush fund? That is nonsense.
How did Tuckey QC conduct an inquiry into Sir Peter Green's operations and come back with a report that was an even bigger nonsense, based on a wholly false premise? We know that a report is to be published that will show that Unimar was a slush fund and that big names and figures are involved. I could give them to the House now, but I shall not bother because it is not part of my speech.
How does the chairman manage to get away with these things? Unless and until Lloyd's can tell the House and the country that it is prepared to hold a rigorous inquiry into the activities of its past chairman, there will be grave cause for concern. It is not just Lloyd's that is involved in the cover-up of Sir Peter Green. I ask any hon. Member to rise now to interrupt me and explain why Sir Peter Green was summoned in March 1983 to see Sir Gordon Richardson, the then Governor of the Bank of England, in the presence of Mr. Henry Benson, his chief tax adviser, to discuss Sir Peter Green's tax affairs.
The Governor of the Bank of England has no standing in law in relation to the tax affairs of anybody in this country. The Chancellor of the Exchequer has no standing in law in relation to the tax affairs of anybody in this country. It is a rigid rule that every private individual's tax affairs, whether they are hon. Members, members of the public or members of the Monarchy, are not discussed by any official. During the last two weeks we have been told by a Bank of England public relations official that Sir Peter Green went to see Sir Gordon Richardson and said, "I've got a tax problem" and that Sir Gordon said, "I'll tell you what to do, Sir Peter. You go and talk to an accountant about it." Sir Peter Green is a multi-millionaire. Which hon. Member will tell the House that Sir Peter Green does not have a gaggle of tax accountants and that he needs to go to the Governor of the Bank of England to be told that if he has a tax problem he should get hold of a tax accountant? It is preposterous. What kind of idiots does the Bank of England think we are? We shall not tolerate that kind of cover-up—in this House, or on the part of Lloyd's, or on the part of the Bank of England.
How did it come about subsequently that Sir Peter Green, who wanted a second term of office as chairman of Lloyd's, was told by the current Governor of the Bank


of England, that he could not have it? Apparently, he went along and said that he had a few tax problems and that they would take him a little time to sort out. Are people trying to tell hon. Members that what Sir Peter Green said to Robin Leigh-Pemberton was, "I owe the tax people rather more money than I have paid. I have got a few problems, but they are not really serious" and that Robin Leigh-Pemberton said, "Oh, well, in that case you had better not carry on at Lloyd's. You had better get out because there is nothing wrong." No; Sir Peter Green has serious tax problems and the House, as well as the Inland Revenue, should be told what they are. That should be part of the inquiry. Until we can get to the bottom of it, nobody will take any notice of any protestation by Lloyd's. I am certainly not going to take any notice of William Beckett, the solicitor, telling me that they have cleaned up the place.
I saw William Beckett last Friday. I did not go along to see him. I went along just to look around the building. I was given a very pleasant guided tour, and he invited me to have a chat with him. I was surprised when he said to me that there was nothing in my early-day motion that Lloyd's did not know about. I thought, "Well, that's a bit odd, because these early-day motions are serious." The Chancellor of the Exchequer talks about McCarthyite smears, but his solicitor said, "I know about it all." If Lloyd's know about all of my early-day motions, may I remind the House that one of them relates to the fact that when Mr. Leslie Dew worked for Merrett he was leading substantial banking business for Alexander Howden. A number of the commissions were being paid direct into a Swiss bank account. Mr. Leslie Dew is a former vice-chairman of Lloyd's. How is it that the chairman and the vice-chairman of Lloyd's never seem to get investigated while the others do? If Mr. William Beckett and his predecessors—because Mr. William Beckett has just come from the Department of Trade and Industry—knew about that, why did they not hold an inquiry? If they want some leads, I shall give them a few.
The Alexander Howden banking business, which is related to Lloyds International and possibly to one other customer, was authorised by Mr. Kenneth Grob and Mr. Commerie, who are well known figures. The administration was carried out by Mr. Graham Sloan, the director of banking. Mr. Graham Sloan knows the Swiss bank account number into which the monies were paid because he paid them into the Swiss bank account.
The administration was also carried out by Mr. John Varney. All that Lloyd's has to do is to question these people and Mr. Leslie Dew to get to the bottom of the scandal. That seems fairly easy and straightforward. Why has it not been done?
I did not talk directly about that case to Mr. Beckett, but he asked me, "How far back do you want to go?" I told him, "As far back as there are people still alive." I am a barrister and I know that if someone commits a murder, a robbery or any other crime and someone finds out about it eight years later the person is not told, "You committed the crime eight years ago, so we'll forget it." People are charged for such crimes and go to prison, so why does not that happen in the Lloyd's case?
It is said that the information in my early-day motions is known. Several of the motions relate to the activities of Sir Peter Green and they give a lot of leads. If Mr. William Beckett and Lloyd's know all about this activity, why have they not at least—without charging Sir Peter Green as

being guilty—carried out an investigation to answer all the questions that all the people at Lloyd's, not me, are asking? We must have some explanation from somebody. I can see some panic in the Box behind the Speaker's chair. The people there seek an explanation. The Minister laughs and shakes his head, but I shall be interested in his answer. I know that, because I can read him like a book. He is doing his best. I have no criticisms of his activity in any sphere, but I know that he will not give me a satisfactory answer.
Sometimes I wonder just how far the power of Lloyd's goes. I am about to send to the Lord Chancellor a document drawn up by a reputable solicitor. I have seen the solicitor and talked to his managing clerk and to some other people. When the British establishment starts to worry about cases, it illustrates how odd things can get. The document concerns the conduct of the Senior Master at the Royal Courts of Justice. He is not a judge, so l can talk about him. He deals with proceedings before they reach court. The case, which is over was called Tubero v. Toomey and involved 15,000 other Lloyd's names who were sued in a representative capacity. It was a recent action which was struck out. It concerns the loss of gems in Los Angeles.
I make no comment on the merits of the case. I have no interest in the plaintiffs and no interest in the defendants, but I am concerned with what happened. On 4 November 1984 the case was listed to come before Master Turner but the Senior Master, J. R. Bickford Smith, for reasons that nobody can understand, grabbed it for himself and insisted that he should deal with it. There is evidence that he had seen the papers, although he was not to deal with the case.
In December of that year—

Mr. Cash: On a point of order, Mr. Deputy Speaker. Perhaps you can give some guidance about whether article 9 of the Bill of Rights applies in this case. Will you reflect on the matter?

Mr. Deputy Speaker: (Mr. Harold Walker): I am not here to interpret the Bill of Rights.

Mr. Sedgemore: The case went before Master J. R. Bickford Smith. Counsel said to him, "Do you really feel you can deal with this case because one of the defendants is called J. Bickford-Smith. J. R. Bickford Smith does not have a hyphen in his name, but J. Bickford-Smith does. Master Bickford Smith lied to counsel. Yes, he lied. He said:
You will not find another master in this corridor, nor a single judge in this building, who is not a Lloyd's underwriter.
That statement was manifestly untrue, because all the masters are not Lloyd's underwriters.
There might have been an inference that those Bickford Smiths were related. I have had a genealogist check the position and I can report that the grandfather of both of them was George Smith and that J. R. Bickford Smith is the cousin of J. Bickford-Smith. What is the Senior Master doing when one of the defendants in a case is his cousin? What is he doing when one of the other masters just down the corridor, Master Topley, is also a Lloyd's underwiter and a defendant in a case and is his best friend, and when the wife of Master Topley witnessed the marriage of Bickford Smith?
Further, what is happening in this case when of the solicitors, Elbourne Mitchell, Elbourne is a member of


Lloyd's council, is a consultant in the case and is also a defendant in the case and Mr. Mitchell, the senior partner who is dealing with the case, is also a defendant in the case? It is all beginning to look very mucky.
I will take the grin off the Minister's face when I tell him that there was an absurd, pathetic letter from the Lord Chancellor's office which will have to be answered when it is claimed to an American attorney that there is no relationship between the Bickford Smiths. The Law Society is still looking into the activities of the solicitors in this case. Master J. R. Bickford Smith, the Senior Master—who happens to be a member of the Athlumney Freemasons Lodge, and there appear to be other freemasons in this case; we have a curious combination of freemasonry and the power of Lloyd's—actually makes orders which are outside the rule book for which he is personally responsible.
When the Lord Chancellor looks into this case, he will find a vipers' nest. It makes one wonder how far these sorts of relationship can go when we are talking about the vice-chairman of Lloyd's and no inquiry; about the chairman of Lloyd's and no inquiry; about the Senior Master at the Royal Courts of Justice and things going wrong; about the Law Society saying that it cannot believe what it is hearing; and about the Lord Chancellor's department writing silly letters to American attorneys. Where will it end?
There is grave public concern over this matter. I have received 800 letters. I shall not get round to answering them all for the next six months. About 100 of them concern serious cases and about 700 say, in effect, "You must carry on with what you are doing." I have a letter with me—it came this morning; that is the only reason why I have it in my possession now—which is typical. It says:
Dear Mr. Sedgemore
and it is interesting because it links Johnson Matthey with Lloyd's—
As one whose company lost money through Sipra's film ventures and has personally lost a very large sum through fraudulent underwriting at Lloyd's, I can only ask that you keep up the pressure against the ever-increasing criminal activities in the City of London. Self-regulation purely means that the most blatant excesses are curbed, and self-enrichment continues unabated by those who are on the inside track.
I have had many letters of that type. QCs have been writing to me saying that they intend to sue Lloyd's, and there will be a great deal of dirt and flak about. They are writing to me as though I can do something to help them, so that they do not have to sue Lloyd's and there does not have to be any flak. I cannot do anything to help them. Lloyd's must clean itself up or the Government will have to do the cleaning up for it.
I have a letter here which mentions Sturge and Company. I have a letter from Peter Rawlings which is so hysterical that it could have been written by the Chancellor of the Exchequer. He complains bitterly that I have mentioned them in an early-day motion and says that there is nothing to inquire into. I am going through a file on Sturge and Company, and when the new year comes and I have had a chance to sort it all out I shall make public what I know. Then Mr. Rawlings can write me another letter, although I hope that he will write it in less hysterical terms.
There is a serious problem, and the kind of self-regulatory devices that the Government are thinking up for the City of London are not sufficient. I hope that I shall be able to speak on Second Reading of the Financial Services Bill and even get on the Committee. It will be the only Committee that I have ever volunteered to go on. We can then go into these matters in great detail. It is not fair to say that we have not yet come forward with proposals. We shall come forward with a clutch of proposals which should help to alleviate the position.

Mr. Peter Thurnham: I congratulate the hon. Member for Rhondda (Mr. Rogers) on initiating this debate, but I find the attitude of Labour Members difficult to understand. The Labour party decries profits, but if investors do not make profits Labour Members are the first to shout fraud.

Mr. Rogers: On a point of order, Mr. Deputy Speaker. Profits have been mentioned twice now, first by the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) and now by the hon. Member for Bolton, North-East (Mr. Thurnham). If they had bothered to listen to my speech, and if they read Hansard tomorrow, they will know that nowhere did I mention the word "profit". I mentioned fraud on many occasions. My hon. Friends have now provided manifest evidence that there is a lot of fraud going on. Never at any time have I mentioned the honest—

Mr. Deputy Speaker: Order. The hon. Gentleman is not raising a point of order for me.

Mr. Thurnham: Perhaps the hon. Gentleman has forgotten that he is a member of the party that taxed investor's earnings at 98 per cent. It is fraudulent for a Labour Member to initiate such a debate when one looks back at the Labour party's record. My hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) talked about not liking a grapeshot approach. It is the grease gun approach, the smear gun approach, that I do not like. If the allegations of the hon. Member for Hackney, South and Frauditch are true, he should take them to the police in the first instance, as the police have said they wish he would. If they are not true, is it not a gross abuse of this House for him to publicise them in the way that he has done?
I thought that the hon. Member for Dagenham (Mr. Gould) would lift the tone of the debate somewhat, but I was disappointed at the way in which he attacked my hon. and learned Friend the Under-Secretary of State. I hope that he will not persist in that line of argument. That is no doubt why his leader struck such a poor deal with the Common Market if he was benefiting from his land holdings.
I did not hear all the speech of my hon. Friend the Member for Beaconsfield (Mr. Smith), but I should like to take up the point about the importance of auditors having powers to report on fraud. That is one of the most interesting aspects of the White Paper which my right hon. Friend the Chancellor gave us yesterday. I hope that we shall hear more about the powers of auditors when my hon. and learned Friend produces his Bill shortly.
We have lost the hon. Member for Bolsover (Mr. Skinner), but it was his union which was so busy trying to bankrupt the country at the time when he was saying the Government should have been worrying about our banks.
I want to look at the job that the City does, because it is the financial centre not only of Britain but of the world. It is the greatest financial centre, and we must ensure that it remains so. I look forward to the White Paper later today setting a legislative framework which will ensure a successful and great future for London as the financial centre of Britain and the world.
I trust that my hon. and learned Friend has considered the White Paper carefully in relation to the new Bill, as I believe that the key to self-regulation is for auditors to have power to go to the relevant body if necessary. If the power exists it becomes unnecessary because the client will wish to discuss the matter with the regulatory agency if he knows that the auditor has power to do so in any case. That was a key proposal in the White Paper on banking supervision, and I shall be interested to know the extent to which my hon. and learned Friend believes that it would be valuable in the new Bill.
I remind the hon. Member for Dagenham that we do not just look back to 1981. We can go back to 1720 and the South Sea bubble. More recent incidents include London and County Securities. It is extraordinary how long the Labour Government took to act in the secondary banking crisis. Indeed, we had to wait until 1979 for legislation on that. Yet Labour Members now criticise the present Government, who have acted very promptly.
The Opposition talked about fraud in the City, but no one mentioned fraud elsewhere, although the Library can provide notes on that, too. In 1984 there were 77 reported incidents of fraud in local authorities. As so many of them failed to answer the questionnaires sent to them, it is thought that a large number of frauds also went undiscovered. Fraud is not just a matter for the City. It is a matter for all activities, both commercial and municipal, and we must be on our guard on that account.
I shall not detain the House any longer, as I know that my hon. and leaned Friend the Minister wishes to begin his reply.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard): I welcome the opportunity to contribute to this debate on a subject of great importance to people far beyond the City.
Honest dealing is fundamental to the working of our economic system, but our concern goes even deeper. Our whole system of morality is threatened if it is thought that fraud of any kind is tolerated. If it is tolerated in one place, it will quickly spread and become the norm elsewhere. That is why the Government have taken a whole series of steps to prevent fraud and to punish it when it occurs. They are serious steps, not just allegations about particular losses.
The foundation for many of the measures that I shall describe were laid over a period of several years and are not simply responses to recent headlines. The hon. Member for Dagenham (Mr. Gould) acknowledged that. He referred to the setting up of the Roskill committee in 1983 and the Gower committee in 1981. These steps have been at the forefront of Government attention for a considerable time.
Maintaining confidence in our financial institutions is a major task of my Department and of others primarily concerned—the Treasury, the Law Officers and the Home Office—and we recognise the seriousness of fraud. It not only causes loss to individuals, sometimes on

a disastrous scale, but it can lead to business collapse and unemployment. The reputation of London, Edinburgh and other financial centres is a precious national asset which we must constantly strive to maintain. Fraud damages us all, so combating it is a national priority. I believe, too, that we all have a duty not to inflict unnecessary damage on those interests by exaggerating the scale of the problem. Serious though it is, it must be kept in proportion.
Despite what has happened at Lloyd's, for example, no Lloyd's policy holder has not been paid when he or she has a valid claim. The depositors in JMB have not lost their money. It is just as dangerous to exaggerate the scale of the problem as to minimise it. Those who exaggerate the problem are doing us all a great disservice.
I should like to review the Government's action programme on fraud. First and foremost, fraud involves crime, and I want to deal first with the criminal law aspects. Action to combat fraud is essentially a matter for the criminal law. The government have been active in seeking to overhaul our systems, laws and procedures, the better to tackle the growing amount of fraud and its increasing sophistication.
The difficulties in tackling commercial fraud should not be underestimated. Those who perpetrate fraud are usually careful to cover their tracks, and unravelling complicated transactions is a lengthy and painstaking process. Any criminal prosecution must be founded on evidence that is both available and admissible in criminal proceedings in this country. Interested parties are often reluctant to co-operate with a police investigation, for fear of prejudicing themselves in civil proceedings. Difficulties often exist in obtaining overseas evidence. If a witness is located within the jurisdiction of a foreign state, no power exists where by investigators in this country can compel the production of his evidence here.
A striking example of this kind of problem is provided in some of the cases involving Lloyd's. As my hon. And learned Friend the Solicitor-General informed the House, the investigations concerning the affairs of the PCW syndicate and Alexander Howden were first referred to the Director in 1982. He added:
Two separate but related investigations are being conducted under the auspices of a fraud investigation group formed for that purpose. It comprises police officers, members of the Director's professional staff, accountants and very experienced specialist: members of the Bar. Despite the considerable financial and manpower resources devoted to the case, serious delay has been imposed upon the progress of these investigations by the necessity of securing, in a form admissible in any criminal proceedings in England, evidence which hitherto has only been available from witnesses located within the jurisdiction of a foreign state."—[Official Report, 25 November 1985; 'Vol. 87, c. 362.]
The Solicitor-General went on to explain the difficulties and the way in which he hopes to overcome them. There one finds the distinction between cases such as those before us tonight and cases that were the subject of a comparison which the hon. Member for Dagenham must have known was too facile to be seriously helpful in the context of this debate. He spoke about frauds perpetrated on the DHSS and about action that was taken to deal with them. Is he suggesting that there is a problem in relation to frauds perpetrated on the DHSS because one cannot get the evidence that is located in a foreign country? Is he suggesting that the difficulties of getting the evidence necessary to satisfy a criminal court on the burden of proof are remotely comparable in cases involving fraud on the


DHSS and the cases with which we are now concerned? If so, he is demeaning the tone of what I hope over the weeks and months ahead will continue to be a very serious debate on this topic.

Mr. Gould: Had the Minister listened carefully to what I said—I am sure that he did—he would know that I was suggesting that we expected to see the same zeal, prompt action and use of resources in respect of the Oxford social security investigation put to the service of detecting major criminals who have got away with thousands of times more money than did any of the pathetic people in Oxford who were rounded up by the police.

Mr. Howard: I share the hon. Gentleman's desire to bring to book those who have got away with these large sums of money, and so do the Government. My hon. and learned Friend the Solicitor-General told the House frankly of the difficulties encountered in bringing these prosecutions. The kind of problem that he identified is precisely that which has been studied by the Roskill committee. That is what it was set up to consider. Its terms of reference were:
To consider in what ways the conduct of criminal proceedings in England and Wales arising from fraud can be improved and to consider what changes in existing law and procedure would be desirable to secure the just, expeditious and economical disposal of such proceedings".

Mr. Rogers: We could well accept that the Government are applying themselves to a change in the law so that frauds can be prevented or made more easily detectable, but if a criminal act is taking place today, when there are obviously insufficient resources to pursue the criminals assiduously, why do the Government not take specific action to make more money and resources immediately available? I understand that there are only 21 people associated with the DPP investigating fraud, whereas there are 175 people associated with investigating social security frauds.

Mr. Howard: There is no secret about resources. My hon. and learned Friend the Solicitor-General has made it plain to the House that the question of resources is under active consideration. An application has been made and the matter is under consideration with a view to increasing the resources available to the fraud investigation groups. The difficulties, essentially, do not arise out of a lack of resources; they arise out of the procedural difficulties which the Roskill committee was set up to consider.
We look forward to the recommendations of the Roskill committee. We hope that its report will be published early in the new year and that it will play a critical role in enabling the criminal law to be a more effective vehicle for prosecuting fraud. Meanwhile, the Government are undertaking major changes in the system of prosecuting fraud. We have heard mention of the fraud investigation group system, which is designed to co-ordinate the legal and investigative aspects of an inquiry. It comprises police officers, members of the professional staff of the DPP, accountants and specialist members of the Bar. It has its own staff accountants. There is a training programme to ensure that the lawyers have the necessary understanding of accountancy, and a panel of specialist accountants is being compiled. The Department of Trade and Industry puts at the disposal of the fraud investigation group

investigatory powers under the Companies Act. There we have machinery set up, representing a new way of pooling all the skills that are needed to combat sophisticated crime, and beginning to show its effectiveness. The central role which the criminal process will play in relation to fraud will always remain.
I turn to another area in which we have made less progress than I should have wished, and where again we propose to increase our powers to improve the effectiveness of the action we take. My hon. Friends the Members for Birmingham, Selly Oak (Mr. Beaumont-Dark) and for Nottingham, North (Mr. Ottaway) referred to the number of prosecutions for the offence of insider trading. We created a criminal offence in 1980, and a lamentably small number of successful prosecutions have been brought since that offence was put on the statute book. It is difficult to prove as a criminal charge. It is necessary to prove beyond all reasonable doubt that the defendant knew that he was in possession of price-sensitive information—not probably knew, or might have known, but definitely knew—and other jurisdictions have similar disappointing experiences.
I invite the attention of my hon. Friends who raised that point, and of all others who are seriously interested in the problem, to the powers that we propose to take to deal with the matter. They are contained in the Financial Services Bill and go considerably further than any powers that have ever been brought to bear on the problem. I put that forward to hon. Members as an indication of the seriousness with which we take the task of tackling abuse, malpractice and fraud.
I could cite a number of other measures that the Government have taken: the prosecutions that are carried out by my Department for fraudulent trading and failure to keep accounts, company investigations, the compulsory winding up of companies and the disqualification of unfit directors, where powers have been considerably extended and enhanced under the Insolvency Act 1985.
My hon. Friend the Member for Beaconsfield (Mr. Smith) was kind enough to refer to my recent speech on the role of accountants, especially auditors, in the fight against fraud. The Government's concern about this originated with my predecessor—my hon. Friend the Member for Edinburgh, Central (Mr. Fletcher)—and, as a result of his concern, the Institute of Chartered Accountants set up a working party a year ago, chaired by Ian Hay Davison, to examine the whole subject of fraud and what the accountant should be doing to prevent it in today's conditions. The working party's report was a most constructive response, and I pay tribute to those who produced it.
Since then, there has been a further report from a committee chaired by Lord Benson, which has also been helpful. The Government believe that those reports do not go far enough and that it is necessary for auditors to recognise a duty to report evidence of fraud, when they come across it, to the relevant authorities. We think that it is necessary in certain instances for that evidence to be reported without first informing the directors of the company concerned.
In a few hours, the Financial Services Bill will be published. It establishes a number of additional protections for investors, some of which are sufficiently well known for me not to be breaking any confidence by revealing them at this stage. All investment businesses will have to be authorised. There will be at least one designated


regulation agency, with a wide range of powers to enable the investment authorities to ensure effective regulation. There will be compensation schemes to protect investors. There will he powers for the Secretary of State and any designated agency to apply to the court for injunctions to counter breaches of the legislation and to obtain restitution orders designed to recover for investors money that has been obtained in contravention of the legislation or the rules. There will be wide powers of investigation for the Secretary of State and any designated agency. All these measures will go a long way towards creating a climate that will be hostile to those who set out to perpetrate fraud. The debate has concentrated on the detection and the prosecution of fraud—the prevention of fraud is, none the less, important. It is in that context that we see the importance of the Financial Services Bill.
I turn to the subject of Lloyd's and begin by making my position clear, as I undertook to do. I ceased all underwriting at Lloyd's on 2 September, the day on which I was appointed to the Government, as required by the rules for Ministers in my position. I accordingly resigned on that day from all syndicates in which I had previously participated. I have done exactly what the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) suggested to the Prime Minister that I should do, except that I did it three months before he wrote to the Prime Minister about it. It is true that I remain a member of Lloyd's, but I have no further business there save for the running off of my pre-existing contracts.

Mr. Gould: The House will be grateful to the Minister for that explanation. As he has now made it clear that he was obliged to give up his membership, I think that he gives the lie to those of his hon. Friends who attempted to argue a little earlier that his position on this issue was no different from that of the Minister of Agriculture, Fisheries and Food, who might own some agricultural land. Will he concede that what he has told the House is at variance with what his hon. Friends attempted to argue?

Mr. Howard: The arguments of my hon. Friends is on the record and those who examine it will form their own assessment of its validity.
I shall deal with the substantive issues which have been raised on Lloyd's. I do not propose to respond to the

various matters which were aired by the hon. Member for Hackney, South and Shoreditch. He assures the House that he has drawn to the attention of the police all the information that is in his possession. The police are clearly the appropriate people to be in possession of the information to which the lion. Gentleman has referred. What he thinks he will achieve by using the privilege of the House to repeat that information, if it is in the hands of the police, is a matter that only the hon. Gentleman can answer.

Mr. Sedgemore: I am puzzled by what the Minister is saying. Lloyd's has a disciplinary machinery which it has not used in certain instances. Why is the Minister talking about the police? We are talking about Lloyd's making its own inquiries.

Mr. Howard: The hon. Gentleman assured the House earlier that he had put all the information in the hands of the police. He has said that he has done so, and I do not doubt that he has. However, I wonder why, having done that, and having ensured, so he tells us, that the information is in the hands of the police, he thinks it necessary and appropriate to use the privilege of the House to make various allegations.
Substantial progress has been made since the passage of the Lloyd's Act 1982 and the putting into place of the regulatory system under that measure, to establish an effective regulatory system at Lloyd's. It is too early to judge whether that system is sufficiently effective and one in which the Government can have sufficient confidence.
It may be appropriate to conclude by saying that the Government will not hestitate to take any action that is necessary to ensure that there is an effective regulatory system at Lloyd's. The Financial Services Bill, which is designed for entirely different purposes and to deal with a different area of concern—to set up a regulatory system to deal with investment business—is not, as we see it, the appropriate vehicle for that sort of action. If it is necessary to amend the Lloyd's Act 1982 to ensure that a proper regulatory system is set up, we shall not shrink from doing it, just as we have not shrunk from discharging our duty—
In accordance with MR. SPEAKER'S Ruling—[Official Report, 31 January 1983; Vol. 36, c. 19]—the debate was concluded.

Low-paid Workers (Incentives)

Mr. Andrew MacKay: Despite the lateness of the hour, it is important that the House be given an opportunity at the end of the year to debate the options which my right hon. Friend the Chancellor of the Exchequer might have in his 1986 Budget. I believe that that debate will continue throughout the country and the House for several weeks until my right hon. Friend rises in his place in March and tells an expectant nation how large the tax cuts will be. Because of the considerable economic recovery, which has now been sustained over a number of years, almost all neutral independent economic observers believe that the Chancellor will have room for substantial cuts in taxation in his next Budget.
I wish tonight to discuss some of the options available to the Chancellor. He has the option of cutting the basic rate of tax, the option of increasing thresholds, he could cut national insurance contributions for employers or employees, he could restrict any cuts in those contributions to the lower paid in the bottom three bands, or he could choose to have a lower rate of tax for those earning below average incomes.
I immediately dismiss the last option, because that would cause structural difficulties for the Inland Revenue, and therefore is not a practical option even though it is superficially attractive.
I and many of my hon. Friends believe that certain important factors must be considered when deciding on which option. We strongly believe that the the lower paid should obtain the maximum benefit from any cut in income tax or reduction in national insurance contributions. There are several reasons for that belief: first, it is a matter of equity, secondly, because it is in the interests of the economy; and, thirdly, because it will increase employment opportunities and encourage many of those who currently choose not to work to find employment.
Currently, the basic rate of tax is 30 per cent. The great majority of us, if we are not on the bottom two bands, pay a national insurance contribution of 9 per cent. I suggest that that, in practical terms, means that we are paying 39 per cent. tax at basic rate. I do not believe that people notice on their pay slips how their deductions are divided between taxation and national insurance contributions.
The Chancellor, in his imaginative Budget this year, set the precedent for a varying level of taxation by reducing to 7 per cent. the national insurance contribution paid by band 2 earners—those earning between £60 and £95 a week—and by reducing to 5 per cent. the contributions paid by band 1 earners—those earning under £60 a week. Therefore, their real tax is 37 per cent. and 35 per cent. respectively.
My hon. Friends and I believe that a sensible option would be, first, further to reduce the national insurance contributions that we are paying, and secondly, to increase the level of thresholds and not change the basic rate of tax. Let us assume for the sake of argument—and it is not an unreasonable assumption—that the Chancellor has £2·5 billion to play with, and that is a conservative estimate. We could allow a 6 per cent. rise in thresholds, which would take 500,000 workers out of having to pay tax, and, more important—because we should not by and large be in the business of taking people out of tax

brackets altogether—it would help considerably many low-paid workers, who would then pay only a small amount of tax.
The other half of the £2·5 billion could be used for reducing national insurance contributions. We could cut contributions by 2 per cent. in band 1, 4 per cent. in band 2, and 6 per cent. in band 3. There would be real tax rates of 32 per cent., 34 per cent. and 36 per cent. together with the standard rate of 39 per cent., when including national insurance contributions.
The Chancellor, in his forceful and well-received speech at the Conservative party conference in October, hit a chord to which many people could respond when he referred to the single nurse earning £140 per week. He rightly said that deductions of tax and national insurance contributions amount to £41 per week, and her take-home pay is only £99 a week. If we reduced the basic rate of tax by 2 per cent., as many people suggest, that nurse would be only £2 a week better off. On the other hand, if we followed our proposals of reducing her national insurance contribution and raising thresholds, she would be £5 a week better off—in other words, over twice as much better off under our proposals.
There are dangers of fiddling with the basic rate of taxes, of helping the better off in the community, while the benefits to those whom we are most anxious to support, the lower paid, would be minimal. That is why we feel strongly that whatever assistance is available should go towards the lower paid as the most deserving in the community, who will improve employment prospects and the economy by having that extra boost.

Mr. Tim Yeo: I congratulate my hon. Friend the Member for Berkshire, East (Mr. MacKay) on securing the debate and on the extremely eloquent way in which he put all the points that I was intending to make. I do not think that I would be betraying any confidence if I said that I have enjoyed working closely with him on the subject during the past few days and weeks, and with several other hon. Friends whom I am delighted to see in the Chamber at this early hour of the morning.
The concern of political parties about the problem of low pay is clearly illustrated by the number of hon. Members in the Chamber. There are no fewer than five Conservative Back Benchers present, but only one Labour Member and no Members on the Liberal and Social Democratic party Benches. That typifies the cynical way in which the latter two parties are willing apparently to express emotional concern about the problems of the low paid, but when they have the chance to take part in potentially a three-hour debate, they cannot produce a single representative, at a time when there is not even a by-election.

Ms. Clare Short: I make it clear that we in the Labour party have agreed that it is foolish for large numbers of us to stay up all night when there is no vote, and I shall speak for the Labour party. We are aware that a private argument is going on the Tory party. Staying up all night to make speeches on which there is no vote does not mean that there is a serious commitment to the low paid. The hon. Gentleman's points are cheap and have no significance.

Mr. Yeo: I find that a most extraordinary attitude towards the process of parliamentary debate. Any


argument is far from private. We are having a constructive public discussion about some of the options open to my right hon. Friend the Chancellor. The fact that the alliance cannot produce one representative suggests a lack of real interest in this subject.
I endorse everything that my hon. Friend said. My experience during the past few months has convinced me of the political wisdom of following the route that he described. I have been struck during my constituency duties by the fact that people on average or even above average earnings, who would benefit substantially from a cut in the basic rate of tax, say as clearly as anyone that they believe that resources should be devoted to the low paid in the 1986 Budget.
Many people find that it is not worth their while taking up employment. I admit that it is often low paid, as many unemployed people's first opportunity of work is likely to be low paid. We are anxious that the next Budget helps them. My hon. Friend gave the example of the nurse earning £140 a week. Someone earning £100 a week provides an even more dramatic illustration. For such a person, a 2 per cent. cut in the basic rate of tax would be worth 60p, whereas our proposals would be worth £4·27 a week. Such a decision would be politically wise, and there is ample economic justification for it.
We are not advocating a specific level of tax relief. We do not know what the Chancellor's judgment will be. He does not know himself, as variable factors must be assessed nearer Budget day. Employment can be stimulated by means other than tax cuts—we must also consider employers' national insurance contributions. If they could be further reduced, the cost of employment would also be reduced. Other steps were initiated in the autumn statement. There is to be additional expenditure on housing, roads and hospital building, all of which is good for employment.
I am delighted that my hon. Friend the Member for Huntingdon (Mr. Major) is the Minister who is to reply. His experience as a Whip means that he is quite familiar with my views on these issues. I should like to take this opportunity to congratulate him on achieving his new position. We are fortunate to have him here, because he has been deeply involved in the social security White Paper. If he had had the choice, I dare say he would not have chosen this morning to reply to a debate. He spoke of national insurance contributions only last week.
The changes introduced in last year's Budget were of historic proportions. The Budget introduced reduced rates in bands 1 and 2 for employees and in bands 1, 2 and 3 for employers. It has already done much to improve incentives for the low paid, and in 1986 we want to build on that start. If we follow the route that my hon. Friend the Member for Berkshire, East signposted, we shall target the available relief towards more than 6 million full-time adult workers, that is, those who earn up to £140 a week. It is a way of introducing a reduced rate of tax. I hope that during the coming weeks my hon. Friend the Member for Huntingdon and my right hon. Friend the Secretary of State will urge their colleagues in the Treasury to adopt that course.
Finally, I strongly welcome the social security White Paper proposals on family credit. My only anxiety is that the possible shift of child benefit from being paid directly to the mother may mean that some benefits will not reach her. As family credit is based on net rather than gross income, it represents a major step forward and opens the

way for large-scale tax cuts at the lowest end, because those tax cuts will be partially self financing. The Government have a chance to move into a genuinely virtuous cycle. This is an important debate, and I commend my hon. Friend's ideas to the House.

Mr. Steve Norris: If it was difficult for my hon. Friend the Member for Suffolk, South (Mr. Yeo) to follow my hon. Friend the Member for Berkshire, East (Mr. MacKay), whom I congratulate on initiating this important debate, it is even more difficult for me to follow my hon. Friend the Member for Suffolk, South. As my hon. Friend the Member for Suffolk, South frankly pointed out, many hon. Members have worked on this subject for some time, and it is fairly obvious that our views generally accord and run along similar lines. I am encouraged that the foundation of my hon. Friend's logic on why it is important to direct any available spare finance in the next Budget follows exactly the same lines as mine. There are two strands of argument. One is about social equity, and the other is about the practical consequences of the measures available to the Chancellor.
I congratulate my hon. Friend on the excellent article called "Tax cuts that would make jobs" which was published in The Times of 16 December. Ai hon. Members will recognise that it was an important, and a welcome, contribution to the debate. My gloss on my hon. Friend's arguments is as follows. It may be uncomfortable for many Conservative Members to accept that a written answer on 29 March makes it clear in a stark and tabular form that the direct tax burden on a family of four who are on two thirds of average earnings has increased since 1978–79 by 10 per cent., while for the same family on 10 times average earnings the burden of taxation has fallen by 22 per cent. It is equally true that the highest marginal rates of tax—the sort of rates that used to have Conservative business men jumping up and down in the aisles—are more than 90 per cent., and are, sadly, being paid by the low paid. No Conservative Member could welcome that. I recognise that it is the product of a complex relation between tax and benefits, and that even those who find that the burden of tax on them is proportionately greater than it is on those on higher incomes are, nevertheless, in many ways significantly better off then in 1978–79. However, an unforeseen by-product of some of our more positive financial and fiscal changes was the present position, and the low paid now rightly demand our attention.
I endorse in the strongest possible terms the point made by my hon. Friend the Member for Suffolk, South about the extent to which, in Conservative circles, people who earn many times average earnings and for whom the concept of average earnings has no relevance are saying that they do not need reductions if the alternative is that the money can be better expended in alleviating the plight of the unemployed, creating jobs, and getting industry and the economy moving more quickly. It is to their credit that they say that.
This strand of representation made to me and to many hon. Members runs counter to the traditional, Labour-inspired image of Conservative business men as unmitigatedly venal and avaricious. The reality surprised many of us, but the message is clear and unequivocal: in terms of social equity, the point is accepted even by those


who would have most to gain from the alternative—one among those put forward by my hon. Friend the Member for Berkshire, East—of a direct cut in tax rates.
As powerful as the arguments about social equality, to which I hope I have added in some small way, are the arguments about the practical effectiveness of direct tax reduction as against threshold and national insurance adjustments. The hon. Member for Birmingham, Ladywood (Ms. Short) will forgive me if I indulge in some private grief this morning and discuss the fortunes of the Conservative party with some of my hon. Friends. It may be believed that reductions in income tax rates have a dramatic quality, in terms of their perception by the electorate, which make them especially valuable and desirable.
I question that conclusion. It has been my consistent experience that when the Government knock 1 per cent., 2 per cent., or even 7 to 8 per cent. off income tax, those who are paid on PAYE will find that almost no difference has been made to them. Therefore, even on the grounds of its supposed marketing effectiveness, I do not believe that the 2p argument—I am using 2p, because I agree that we should suggest a figure of £2·5 billion as being available to the Chancellor, because it is a figure that has been used before and because it is as convenient as any other for the purposes of this argument—bites at the level at which it is suggested it should.
In addition, what I know with even greater certainty and clarity, because it is a conclusion that I can draw for myself, is that while I am sure that every hon. Member welcomes 2p in the pound off tax and would not look a gift horse in the mouth, it will not get me to work much earlier than I do, nor will it make me stay there all that much longer. In addition to my duties in the House, I spend every other waking and breathing moment trying to earn a decent living. In so doing, the rate of tax that I pay is in common with that of a number of my hon. Friends—we seem to share much personal experience in the debate, never mind our confluence of thought.
I simply do not buy the argument that 2p off income tax will give the average business man the greater incentive with which he not only becomes richer, so the theory runs, but goes out, works harder, innovates, invests and produces more jobs at the end of the day. Unless I am mistaken, the thrust of the argument about incentives to the better off, to those with intitiative and entrepreneurial skill is that as one reduces tax and makes them perceive a greater reward for their labour, they are inspired to greater effort to work harder and, in so doing, to produce more jobs. I do not believe that that argument works in relation to the amount of money that my right hon. Friend the Chancellor of the Exchequer is likely to have, on even the most optimistic forecasts of what is available for this year. I do not believe that 2p in the pound is effective as a mechanism either in terms of its marketing impact or of its impact on incentives.
Secondly—here I express a different view from some Labour Members as to its impact—I take the view that it is reasonable for any person on unemployment benefit, faced with the prospect of low-paid employment, to say that it is simply not worth his while taking a low-paid job at less—for example as a married man with two children—than £120 a week when that amount will be available on benefit. One of the most unhelpful and

unrealistic comments that is occasionally heard from these Benches is that such people are drones on the system, and that they are morally reprehensible because they are seeking to live on benefit and not to get jobs.
If I were offered the choice between bringing into my household £120 in benefit for not working and any significant smaller amount if I took a low-paid job, I would be likely to take the former course, and I suspect that that is a rational and reasonable choice to make. In a positive sense, not a condescending or critical sense, I believe that the relationship between unemployment benefit and low paid jobs is crucial.
It follows that when my hon. Friends adduce the example, much quoted in the newspapers, of the nurse on £140 a week, I would infinitely prefer to see that nurse, if a single person, £5 a week better off as a result of adjustments to the national insurance rate and thresholds rather than be £1·90 better off if she gets a 2p tax reduction.
One always feels reticent about employing such a phrase, because it is hackneyed, but anybody who has employed people in low-paid jobs will recognise that a constructive contribution can be made by employers who are prepared to take on people in low-paid jobs. There are jobs that it is not worth an employer's while to offer if he has to pay high wages for them, but if he can offer a real, realistic wage for them that can allow him to be profitable it will at least enable him to offer some person, perhaps on a part-time basis, employment at a low wage. Such jobs exist, and the money that an employer is prepared to pay out is as real as any other amount of wages that he is prepared to pay.
Therefore, it is of crucial importance to recognise that the trigger mechanism of national insurance which operates not necessarily at the top band but at the £35·50 and the £55 marker on present rates is a significant factor in determining what kind of low-paid employment will be offered. National insurance is different in this respect from the thresholds. The irony is that this is because it is in the interests of both employers and employees that wages should be kept below the trigger figures. Above those figures one reaches the ridiculous position that one earns an extra 50p but loses £2. That cannot be sensible.
The longer-term goal is the complete reform of national insurance charges. If one were to delve into the matter, I suspect that one would find that there is no significant justification for the principle of national insurance charges. The principle that there is any direct relationship between what one pays and and what one gets out of the system has been blown to smithereens time after time by successive Chancellors of the Exchequer, of either political colour. The crucial argument about triggers is whether their impact will encourage or discourage employment. Anybody who has offered salaries or wages of around that figure knows that they are a discouragement.
Last year my right hon. Friend the Prime Minister said frequently and, I thought, to some considerable effect, particularly at Budget time, that her concern was to address precisely the anomaly that my hon. Friends and I have addressed this evening: that there is a significant number of people who, quite rightly, do not seek employment and who, for other reasons, may not be offered employment by employers because of the mismatch between the social security arrangement, such as it is, the taxation arrangements and the availability of


low-paid employment. That was a crucial part of my right hon. Friend's explanation of the Budget strategy last year. I hope that the Parliamentary Under-Secretary of State for Health and Social Security, my hon. Friend the Member for Huntingdon (Mr. Major), will convey to my right hon. Friend the Prime Minister and to my right hon. Friend the Chancellor of the Exchequer the view that what was good for the country 12 months ago in relation to this argument is good now.
To that may I add a final rider. To imagine that either the mood of the nation, or the logic of the argument, or the rules of arithmetic have changed in the last 12 months would be a profound misjudgment, the consequences of which would be extraordinarily far-reaching for this Government.

Mr. Bowen Wells: I believe that in this debate we are addressing one of the most crucial and difficult matters that could be discussed at this time in the morning. I join in congratulating my hon. Friend the Member for Berkshire, East (Mr. MacKay) on raising this subject for debate. His heretical views have been echoed by my hon. Friends the Members for Suffolk, South (Mr. Yeo) and for Oxford, East (Mr. Norris). I join them also in welcoming the Parliamentary Under-Secretary of State for Health and Social Security, my hon. Friend the Member for Huntingdon (Mr. Major), to his post. It is the first time that I have spoken in a debate when he has been sitting on the Treasury Bench. I congratulate him upon his appointment. We are glad that such a sensitive, sensible person is holding that position at this particular time.
The really important issue that has to be addressed is one of the absurdities of our national life today. My hon. Friend the Member for Oxford, East said that it would be logical and sensible for a married man with two children to remain on benefit rather than to work. That is because we have not tackled the inter-relationship between our tax system and our benefits system. The Conservative party, in the run-up to the general election in 1970 and during the lifetime of that Government, have had as one of its objectives the establishment of a system that took account of both the tax system and the social security system. We have lamentably failed to follow that argument through, but we must continue to aim for that solution. It is crucial to getting employment going, particularly for young people, and to providing the human energy necessary to expand the nation's economy. That is why this discussion is so important.
The review by the Department of Health and Social Security was heralded as the "new Beveridge", but it does not take account of the fact that child benefit is paid universally regardless of need and it does not tackle the stupidity of paying supplementary benefit to people leaving school at 16 years of age. If we do not tackle those issues, we cannot begin to tackle the whole crucial problem.
If we fail to combine the social security and tax systems and compound that by trying, through a miasma of seeking popular support by reducing the tax rate from 30 per cent. to 28 or 25 per cent., we are seriously mistaken.
We must remove from tax large numbers of people in the lower income tax brackets. But we have no mechanism by which we can do that. If we raise income tax bands, we shall benefit the whole of the tax-paying community.

That is desirable, but it is not crucial to those on above average earnings. The higher the earnings, the more senseless that becomes. We have no mechanism by which we can pinpoint taxpayers in the lower bands. That is because we have not related the social security system to the income tax system.
We must certainly use the thresholds and the fact that the employees' national insurance contribution has been increased by the Government, resulting in the absurdity of increases in tax for the lower paid. I support my hon. Friend the Member for Berkshire, East in saying that we must adopt a mixture of increased thresholds and decreased national insurance contributions for employees.
I hope that we have an imaginative Budget. The Chancellor of the Exchequer wants to reform the tax system . I hope that his Green Paper shows how far he is prepared to adopt radical solutions. I hope that we can establish a mechanism that will allow us to take the low paid out of tax to make it worth their while to go to work and to use their brains and energy to expand the country's wealth so that we can afford social security benefits for those truly in need.
While my wife and I enjoy drawing child benefit and spending it without having to pay tax, we do not need it, yet there are men and women looking after children on their own who need double the child benefit amount to provide a decent standard for themselves arid their children. It is absurd that we should still be giving child benefit free of tax to households such as mine—the same must apply to the majority of hon. Members—without giving adequate benefit to those who are truly in need.
We should make it our objective—an honourable objective that would attract the support of the vast majority of people—to produce an equitable tax and social security system that gave an amount of which we could be proud to those in need. We would, in the process, make it more profitable for people to go to work and provide for their families.

Mr. Lewis Stevens: I join others in congratulating my hon. Friend the Member for Berkshire, East (Mr. MacKay) on choosing this important topic for debate. In addition, I congratulate the Minister and his Department on the social security review that has been conducted and the White Paper that has recently been produced.
That White Paper looked at the possibility of putting all types of benefit on the same basis. It also uses the net income for income support and family credit systems, rather than the gross wage, which has in the past caused distortions. That may conflict somewhat with the view that some of us have in relation to tax benefits for the low paid, in that they may lose benefit under the new system compared with the present gross wage.
That, however, is for the future—because the new system does not take effect until1988—and it is now, or at least in the next Budget, that we seek benefits for the low paid. We urge the Chancellor to increase the thresholds and reduce national insurance contributions, particularly for the three low bands. That would achieve benefit for people on low pay, and we must concentrate on that section.
Reference was made to the nurse on 140 a week gaining by £5 through tax threshold changes, as against


gaining £2 through a 2p standard rate reduction. It is more beneficial for those on £60 to £70 a week. The proportion that they gain is most important to them, remembering the total amount on which they must live.
People often become confused in that connection. Because people are in receipt of a low wage, it is thought that they automatically get family income supplement, but that is not the case. They may not qualify for that benefit. The position is that people who earn more and pay higher rates of tax all benefit by roughly the same, in cash terms. on the tax side, but not on the national insurance side. Because of that, we should be directing benefit to the low paid. We want people to be encouraged to work, especially the young, and it has been pointed out that, for various reasons, many youngsters have tended to price themselves out of work. The situation is changing for the better, but if that is true they will form quite a large part of the low paid. They will not receive benefits, and so young people need more encouragement.
Pensioners form another group that may be helped by altering thresholds. When they receive a state pension plus a small private pension, they may find themselves having to pay niggling little bits of tax. It is important to remove as many of those people as possible from the tax bracket.
According to the autumn statement, if my right hon. Friend the Chancellor goes along with an indexation of the thresholds in all cases, that will cost about £1·25 billion. The figure of £2·5 billion has been mentioned, which would be double. However, I would go further. It would not matter if we did not increase all the thresholds and increased only those of the personal allowances; in other words, the bottom threshold for the single person and the married person's allowance.
Why should the married person's allowance go up automatically? There may be a case, although perhaps not in this Budget, for looking more closely at the benefits of the married man's allowance and considering whether it should not be an allowance for those who work. Perhaps non-working dependent wives could have some special tax concession. At the moment, some people have a double advantage. I am not suggesting that it should go back to the Exchequer, but it should be distributed across the thresholds. Again, that would have the benefit of pushing the threshold as high as possible. It is still very low.
A single person starts to pay tax on earnings of about £40 a week. Below that figure such a person is already paying national insurance contributions. When earnings reach half the average, at about £90 a week, there is a lot of taxable income in that chunk. By pushing up the tax threshold we improve the situation of that group.
A large number of low earners are in jobs where they are likely to remain low paid. People can move through the different strata, and many of the Government training initiatives have given great encouragement to people to retrain to move out of those lower brackets, but it is still a relatively low wage for such a large proportion. For a single person on half average earnings the figure is about 25 per cent. That is a substantial amount of tax to pay, with national insurance included. The more we can move our tax position away from that £40 level, the more will people be encouraged into lower paid jobs.
The self-employed will also be encouraged. It is easy to think of the self-employed as well off. The enterprise allowance lasts only 12 months. It is not an indefinite

subsidy and they are not necessarily earning a lot of money. In those early years they would benefit from such an increased threshold. We sometimes forget how important the self-employed are. That might encourage people to have a go. They might think that it is worth while to work for themselves if there is a lower tax penalty.
Many years ago, when the west midlands was a very prosperous area, it was not uncommon for people to say that overtime was not worth doing because the taxman took all the money. I am sure that the same could be said about some jobs today. It is discouraging, and anything that my right hon. Friend the Chancellor can do in the Budget to improve the lot of the low paid—to give them better opportunities and some extra money to achieve a real improvement in their standard of living—will be well worth while. Moreover, because the money will go to the lowest paid it will almost inevitably be transmitted directly into goods and services, thus increasing the demand for products, with consequent effects on employment. I believe that that is what we ought to do and I congratulate my hon. Friend the Member for Berkshire, East on raising the subject today.

Ms. Clare Short: Despite the lateness of the hour, I welcome this opportunity to debate incentives for the low paid. I am sorry to break the mood of mutual self-congratulation among the Conservatives, but I am surprised at the narrow attitude that they have taken, isolating the taxation aspect only and not considering the cumulative effect of Government policies on the low paid which has been to drive many more workers into poverty since 1979.
Even on the narrow tax point, the House should appreciate that, despite the 1985 Budget being heralded as a Budget for jobs, there has been only a marginal impact on the large increase in tax burdens faced by low-paid workers since 1979 and a negligible effect on the poverty trap. Despite increasing the tax threshold beyond the rate of inflation for the second consecutive year, the overall tax burden for those on low and average earnings remains significantly higher than it was before the Government took office in 1979.
Because increases in tax thresholds are worth much more to higher rate taxpayers, the 1985 Budget continued the trend of earlier Conservative Budgets in concentrating the benefit of tax concessions on those with already high incomes. The average cut in income tax since 1979 has been £246 per week for a person earning more than £50,000 per year, but for low wage earners it has been little more than £1 per week, which is immediately wiped out by the increases in indirect taxation in the 1985 Budget alone. Therefore, we have a very long way to go before we even get back to where we were in 1979 in terms of the effect of taxation on the low paid. The situation is actually very much worse than that, and concentrating on the narrow point of taxation will not cater for the needs of the low paid in Britain today.
As I said in my intervention, Labour Members welcome the chance to discuss low pay and I discussed with some of my comrades whether it was worth their while to stay up late to put our view. Ever since I was a civil servant and had to run around waking Ministers to reply to debates on the Consolidated Fund, I have taken the view that this is one of our sillier ways of organising our business and, as Labour Members all agree, in our view on the subject


of low pay I believe that it is better for other Labour Members to go home to bed so as to work more efficiently for their constituents or do their Christmas shopping rather than sitting here debating at great length and repeating one another. I should therefore make it absolutely clear to Conservative Members that lack of attendance on the part of Labour Members implies no lack of commitment to the low paid.

Mr. Norris: I hope that the hon. Lady is not suggesting that those Conservative Members who are present are in some way in dereliction of their duty to their constituents.

Ms. Short: Indeed not. I would not wish to suggest that for a minute. I am aware that a healthy argument is going on within the Conservative party, and I respect those within that party who are willing to give up their sleep to press the case for the low paid upon their uncaring Government. I do not for a minute suggest that those Conservative Members who are present are neglecting their duties in any way.
The Opposition want to put on record the fact that we are aware that the increase in poverty wages in Britain since 1979 is no accident. It has been a deliberate part of the Government's philosophy to increase the disparity in incomes between the rich and the poor, and they have been enormously successful in achieving that aim.
One of their methods has been to increase massively the rate of unemployment, which has made workers in secure trade unions weak, as a result of which they have accepted lower pay. From 1979 to the present time, unemployment has increased from 1·2 million to 4 million, and that has caused enormous hurt to individuals and incredible economic waste.
During this period, the rich have got richer and the poor have got poorer. The figures are startling. The proportion of adult men working in manual jobs for low pay—defined as two thirds of average income, which is the internationally recognised definition of low pay—has more than doubled since 1979 from one in 10 to one in five. For full-time women in manual jobs, the proportion on low pay has increased from 66 per cent. to more than 75 per cent. In total, the proportion of all adult workers, including part-timers, earning poverty pay has increased from 36 per cent. to 41 per cent.
The pay of young workers has fallen by almost a third, while youth unemployment has doubled. The poorest tenth of male workers have seen their real pay fall by 5 per cent. while unemployment has trebled to well over 3 million. Low-paid workers are worse off now in real terms than they were in 1886.
As for the high paid, the best paid tenth have received real pay increases of 13 per cent. In 1984, the pay of the top 100 company directors rose by 25 per cent. following an increase of 61 per cent. between 1981 and 1983. The chairman of ICI was given a 68 per cent. pay rise in March 1985, taking his salary from £171,000 to £287,000 a year—and increase of £2,200 a week.
According to the Financial Times on 20 July 1985,
the pay of chief executives in industry has recently gone up very fast and in a good many cases bears little relation to performance".
The top directors of former nationalised industries which the Government have privatised have given themselves average pay rises of more than 85 per cent. in two years, In British Telecom, top pay has gone up from £68,000 to £160,000; and in Amersham International, from £30,000

to £130,000. On top of this pay windfall the Government have given the high paid generous income tax cuts amounting on average to £246 a year compared with a mere £1·06 a week for the low paid.
That is a pattern of an enormous increase in income and cuts in tax for the very highly paid, but the very reverse for the low paid. This redistribution is quite deliberate, and the Government have taken a series of measures to bring it about.

Mr. Lewis Stevens: Is not the hon. Lady aware that during the time of the last Labour Government the real pay of many industrial workers dropped very rapidly, particularly in the car industry in the west midlands, where relative pay dropped rapidly during the early 1970s.

Ms. Short: I am aware that there were some difficulties under the last Labour Government in the west midlands, but the people there who used to work in the car industry do not work at all now. All the figures that I have quoted of relative movements in pay since 1979 stand absolutely. It is no good the hon. Member referring back to the previous Labour Government. Under the two successive Tory Governments since 1979 there has been a massive redistribution in favour of the rich and away from the poor. Inequality in Britain for those in work, let alone the unemployed, has increased massively. It has been deliberate and is part of the Government's philosophy and ideology. They have gone to enormous trouble to try to drive down the wages of the lowest paid.
The Government have abolished the fair wages resolution which existed in Britain since Victorian times to ensure that contractors bidding for Government contracts would not bid each other down by offering lower wages. It has had bipartisan support until recently, when the Government got rid of it.
The Government introduced the young workers' scheme. It is now to be abolished because it has been so unsuccessful. The Government have been paying a huge subsidy of £15 a week to anyone who would employ a young worker at less than £50 a week. The scheme has been heavily criticised by the Public Accounts Committee because it is so wasteful and because 80 per cent. of the jobs so subsidised would have existed anyway. Its whole purpose has been to drive down young people's wages.
The youth training scheme has been used in exactly the same way. In some of our arguments across the Chamber about the youth training scheme, Conservative Members have deliberately misunderstood our criticism. We all share the aim of improving the training system, but we do not share the aim of using schemes for the young unemployed to drive down the wages of young workers.
If the old youth opportunities programme allowance had been uprated in line with inflation, it would now be about £40 a week. The youth training scheme currently pays £27·50. The community programme for the long-term unemployed has been used in exactly the same way.

Mr. Norris: One matter that the hon. Lady raised which has always concerned me greatly is the idea that young workers—those serving their apprenticeship or just out of it—can realistically expect pay which is very closely related, as my hon. Friend the Member for Nuneaton (Mr. Stevens) will confirm, in engineering at least, to the pay of a fully skilled man with 10 or 15 years' experience.
I hope that the hon. Lady will recognise the genuine difficulty that an employer who is faced with the prospect of either paying 90 per cent. of the skilled rate to a lad who has only just finished his apprenticeship, or paying 100 per cent. of the skilled rate to someone who has 10 or 15 years' experience is almost certain to say that it is not worth his while to go through the apprenticeship process, because he is much better off, in terms of sheer productivity, in taking the fully skilled person.
Is it not in the interests of young people in the long term that we should recognise that experience after qualification and after apprenticeship or training scheme counts for a good deal, and that there has to be a realistic differentiation between the wage rates paid at qualification and after considerable industrial experience?

Ms. Short: I agree absolutely with the hon. Gentleman that there has to be a difference between the wage rate paid to the trainee and that paid to the fully qualified and experienced worker, but I do not agree that we have that problem. It is another of the myths that have been propagated so assiduously by the Government. All the studies of levels of youth unemployment and its relationship to wage levels show that movements in wages levels are not the explanation of the great rise in youth unemployment. The rise in youth unemployment parallels absolutely but rises faster than the general rise in unemployment. Indeed, when unemployment is falling, youth unemployment falls more rapidly.
There is no way in which the movement of wage levels for young people in Britain can explain the ups and downs from the 1950s onwards of youth unemployment in Britain. That myth has been put about and the Government went to a lot of trouble to commission research to try to prove their case—they were unsuccessful—and to undermine the famous Makeham study, which is the authoritative study in this area. I agree with the broad principle but not with the implication that the movement in youth wage levels explains high levels of youth unemployment.
Just as the Government have used the youth training scheme to work on the degradation of young people so that they take work, accept low allowances and receive a general rate for a job—they are levering young people down—the community programme has been used to work on the desperation of the long-term unemployed to try to lever down acceptable rates for the adult unemployed. Recently, yet another scheme was announced. It parallels the young workers' scheme and is to be called the job start scheme. It will be piloted in January in six areas. The new scheme will pay £20 a week to an adult worker who has been out of work for 12 months or more if he accepts a wage of less then £80 a week. One million workers work for less than £80 a week. It is a myth that reducing wages will generate jobs.
The Government's proposals on wage councils will exempt young people from their protection and weaken the protection afforded to adults. Recently, the regional low pay units conducted a competition to discover which unit had the lowest paid worker on its books. The west midlands won the competition with an Asian female machinist working in a factory for 15p an hour. That is how bad conditions are getting in Britain generally and in the west midlands in particular.
Another measure that has been adopted to bring about more low pay is the cut in the wages inspectorate. This is an incentive to employers not to pay the minimum legally required rates. The number of people who are not paid the legal rates has increased. Privatisation is part of the process. It saves money if it is used to get workers to do the same job for much lower wages. That is the pattern throughout Britain.
It has been suggested that there is a problem in providing incentives to work and that benefits are so high that large numbers of people are not willing to work. That does not stand up to scrutiny. For example, when the Department of Health and Social Security, the Treasury and the Department of Employment were giving evidence to the Select Committee on the Treasury and Civil Service in 1982, they all agreed that the vast majority of people were better off in work than out of work. Large numbers of people work for wages lower than the amounts that they would receive in benefits because of the sense of commitment to the dignity of work.
Another excuse is the argument that cutting wages will create jobs. The Government have made an enormous effort to prove that thesis but have been unsuccessful. In a consultative paper on wages council abolition or reform—"reform" should be read as meaning "weakening"—the Government referred to a Treasury paper on the relationship between employment and wages and suggested that it provided proof that a cut in wages would increase employment. That whole document is entirely disreputable. In "Pay and Jobs", Treasury Economic Progress Report, No. 174, January 1985, the Treasury suggested
as a rule of thumb that if money wages were to grow less rapidly so that real wages were one per cent. less than otherwise, the gain in jobs might ultimately be between ½ per cent. and 1 per cent., that is between 110,000 and 220,000 jobs".
The Select Committee on Employment was sceptical of those estimates, and said:
The results of the econometric exercises underlying the argument used in the evidence submitted are not of themselves sufficiently convincing without strongly supporting evidence.
Treasury officials admitted that
the simulation results depend critically on a system of adjustments which is entirely arbitrary and has no empirical basis. Without this system of adjustments the model would have produced a smaller rise in company sector expenditure on stock building and employment, and on dividend payments, and hence a smaller rise in employment.
I realise that it is late in the night to quote such a serious document, but that document, which is so flawed, is the theoretical basis for the Government's case that cuts in wages will create more jobs. That case does not stand up to scrutiny.
Nevertheless, the Government continue to pursue that policy. Conservative Members have referred to the 1985 Budget with approval. The new lower national insurance rates are thought to be encouraging employment but, instead, they have brought in a series of new poverty traps for low-paid workers. When they move up slightly from one wage level to another, they move into a higher band of national insurance. The system provides new poverty traps and I am sure that it was designed to do so. It is designed to hold workers down in lower bands of pay, and it will do that successfully. The move from family income supplement to family credit, which is proposed in the White Paper on social security, will undoubtedly


encourage more low pay by paying the benefit to the worker through the employer instead of direct through the DHSS.

Mr. Yeo: When the Labour Government were in office they had an employers' rate of national insurance contributions running at over 13 per cent., including the surcharge, compared with the 5 per cent. to which the Government have reduced the rate for the lowest paid. Was the Labour Government's policy likely to encourage employers to pay higher or lower wages?

Ms. Short: I can tell the hon. Gentleman that when the Labour Government left office in 1979 unemployment stood at 1·2 million. That is when the Conservative party fought an election under the slogan "Labour isn't working". If we calculate unemployment on the same basis now, 4 million are unemployed. His argument does not stand up to scrutiny.
I was saying that the new family credit that will replace FIS is likely to be an incentive to even more low pay. It will be paid by employers to workers, and as employers become familiar with the scheme they will realise that if they bring workers into a low-paid category their wages will be subsidised through the state. Experience will tell us whether that happens, but it seems enormously likely that it will.
The Government have set out deliberately—it is part of their ideology to increase inequality in Britain. They argue that this will create incentives and increase efficiency. It is a strange argument and it has been said frequently that it rests on the assumption that to get the rich to work harder they have to be paid more, and to get the poor to work harder they have to be paid less.
The position is serious for many working people. It should be understood that 35 per cent. of Britain's poor are working poor. The percentage has increased under the Government. The small issue to which Conservative Members have drawn attention is only a small part of the problem and will not solve the problem of low pay. We need to consider a series of measures to deal with it. We need to develop a strategy that seeks seriously to bring us back to full employment. We need to move towards a national minimum wage. We must increase child benefit rather than cut it. That was the call of Conservative Members.
The road that we are on is leading us to a low-paid, divided and inefficient sweat-shop economy. The one small improvement that Conservative Members called for will not succeed in reversing that trend.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major): Before I take up some of the contentious matters raised by the hon. Member for Birmingham, Ladywood (Ms. Short), I congratulate my hon. Friend the Member for Berkshire, East (Mr. MacKay) on raising an important subject and on the manner in which he did so. Perhaps his only failure was to come fourth in the ballot rather than first. I wish him slightly better luck next year, so that we may conduct the debate at a slightly earlier hour of the morning.
My hon. Friend, and my hon. Friends the Members for Suffolk, South (Mr. Yeo), for Oxford, East (Mr. Norris), for Hertford and Stortford (Mr. Wells) and for Nuneaton

(Mr. Stevens), together with the hon. Member for Ladywood, touched on a number of issues with clarity and conviction.
The hon. Lady at the beginning of her remarks referred to what she called a mood of mutual self-congratulation among my hon. Friends. I must tell her, with the best of good will, that it was not mutual self-congratulation, but unanimity that she perceived among my hon. Friends. I can understand why she, as a member of the Labour party, does not recognise unanimity. However, for the Conservative party it is a fairly familiar sensation. She may have noticed that this evening, both in their concern about the issue and in some of the solutions that they proposed.
The Government share the concern that my hon. Friends expressed about the importance of incentives for the low paid. Our concern is reflected not just in words but across a wide range of Government policies, all of which indicate clearly that we respect what the hon. Lady called the dignity of work, and wish, so far as we can, to price people into it.
My hon. Friends spoke of tax and national insurance changes. They know that a considerable amount has been done in those respects in recent years. My right hon. Friend the Chancellor has diminished the burden of income tax both by cutting the basic and higher rates and by substantially raising personal allowances. Indeed, the last Budget—which was referred to on a number of occasions—included the fourth successive real increase in tax thresholds. As a result, personal allowances are now above 20 per cent. higher in purchasing power than they were in 1978–79. I suggest that that is welcome easement that has been of particular help to the low paid, and which has taken 1·25 million of the lower paid entirely out of tax—with, I hope, the support of every hon. Member, from whatever party.
I rather regret that the hon. Lady neglected to mention those matters in her lamentable catalogue, which lasted for more than 20 minutes, of the Government's alleged sins. Much of what she said was highly contentious. She certainly included some quite extraordinary assertions. If I understood her correctly, she said that low-paid workers were worse off today than in 1886. I can only say that if she really believes that, she has entered a fantasy world from which no words of mine will rescue her.

Ms. Clare Short: I wish to correct the Minister. I began my speech by referring to the 1985 Budget and the changes that it made, and said that it still failed to bring low-paid workers back to as good a position as they were in 1979, and that they are still more highly taxed than they were in 1979. Those were the remarks with which I began my speech.

Mr. Major: I shall regard that as something rather less than a wholehearted endorsement of the Government's taking 1·25 million people out of tax. I have nothing to add on that point.
I hope that the hon. Lady will understand that many of her contentious remarks at this late hour are matters which I do not wish to pursue as, quite frankly, they do not enter the real world of politics which any party in government must face. I understand the hon. Lady's difficulties in dealing with many of the matters that she must face to keep her position within her party. Frankly, she should not make the sort of assertions that she made this evening


without producing more practical evidence. When and if she can produce evidence to back her assertion that workers in 1886 were better off than workers today, I shall take more seriously some of her other remarks.
My hon. Friends will know that this autumn the Government introduced a new graduated structure of national insurance contributions which, again, are designed especially to help the low paid. They have been a matter of some comment during our debate this evening. Those tax and national insurance incentives, which have particularly concerned my hon. Friends, raise the opportunity for employers to take more people into employment and for people in employment to keep a larger share of the salary that they earn.
My hon. Friends will know also of the enterprise allowance scheme, giving new incentives for the unemployed to set up in business for themselves, and of the job start initiative, which will commence on a pilot basis next month, with the intention of giving a new incentive to the long-term unemployed to get back into employment. They will also know that earlier this week my right hon. Friend the Secretary of State for Social Services introduced the White Paper on social security reform, which incorporates the new family credit scheme, designed both to improve work incentives and to make the connection between work and the family's overall oncome in work more visible than hitherto. All those measures, in their separate ways, are part of a clear thrust of policy to improve incentives and ensure that we diminish, and if possible entirely remove, barriers to employment.
National insurance contributions, which have been the subject of some discussion, are of great importance. I share the view of my hon. Friends that the new contribution structure is one of the most imaginative initiatives taken in recent years. It was announced in last year's Budget. It should assist dramatically in pricing people back into jobs. I am pleased at the warm welcome that has been given to the measures—and I acknowledge that the hon. Member for Ladywood welcomed them as well—as I share the view of my hon. Friends that they represent a substantial, cost-effective and well-targeted boost for the low paid.
My hon. Friend the Member for Suffolk, South called them historic measures, and I am inclined to agree. They will improve employment prospects, increase net take-home pay and sharpen incentives. I suspect that they will be particularly helpful for the young looking for their first full-time job. In total, those measures for low-paid employees are worth about £1,150 million in a full year.
In addition, we have made a considerable reduction in the contribution rate for self-employed people, which is worth a further £100 million a year. My hon. Friend the Member for Nuneaton referred to that. I hope that he will be pleased that we have also allowed tax relief on half the class 4 profit-related contributions payable by the self-employed. It is pertinent to remind the House that self-employment often lifts people out of unemployment. The national insurance measures that I have listed represent a considerable incentive to people to start up in business on their own account.
The effect of the proposed changes in employers' contributions is to reduce by up to £3 per week the cost of employing over 8·5 million low-paid workers. For the lowest paid the reduction in employers' national insurance

contributions is almost 5·5 per cent., which is a considerable incentive to the creation of employment. Estimates made, not by the Government, but by private industry, are that between 140,000 and 400,000 jobs may be created as a result of that initiative. I hope that that proves to be the case, although I emphasise that that is not a Government estimate. In any event, there is little doubt that those measures will make a substantial difference to the employment prospects of many people.
The effect of the parallel changes to employees' contributions is to give increases to net income ranging from £1·10 a week to £2·18 a week to nearly 3·5 million workers earning less than £90 a week. As hon. Members will know, only last week we debated the Social Security (Contributions, Re-rating) Order, which further increased the bands of earnings over which the reduced rate national insurance contributions will be paid. Therefore, only six months after the new reduced rates were announced, the draft order will extend further up the earnings scale the advantages that they offer to both employers and employees. That is further evidence—if it is needed—of our wish to produce a more responsive and better targeted national insurance system and provide positive incentives for people to take up low-paid work and for employers to offer jobs to those who at present, unfortunately, do not have them.
Another beneficial effect of the graduated rates of contribution is that it reduces the much criticised "cliff edge" effect of the lower earnings limit. There is now a much more gradual increase in contribution liability as someone progresses up the earnings scale. I hope that that principle will earn the support of my hon. Friend the Member for Oxford, East, who touched on that point in his remarks.
It is worth considering who will gain from our measures. Just under 1 million families with children gain at least £1 a week, and some gain more than £2 a week. Nearly 1·25 million single people aged between 16 and 25 gain between £1·10 and £2·18 a week. About 30 per cent. of gains go to families with children, and just under half go to low-paid single people, who are predominantly under 25. One third of gains go to working wives. Those figures show how wide ranging and beneficial the measures are. They should be further enhanced when the new contribution limits and earnings brackets come into effect next April.
It is clear that there is fairly wide agreement that take-home pay is what matters to many employees. My hon. Friend the Member for Berkshire, East is aware that the Government have taken, and are taking, important steps to minimise deductions, especially from the pay of those on lower earnings. Despite that clear direction in our policy, I know that my hon. Friends will not be surprised if I decline to speculate on what steps my right hon. Friend the Chancellor might take in the Budget. Such matters are for him, and contributions are matters for my right hon. Friend the Secretary of State.
I suspect that my hon. Friends are too wise to expect a detailed response to their advocacy of Budgetary and tax matters. I believe that they were anxious to put their views on the record. The fact that they have done so at such an unappealing hour of the morning illustrates, perhaps more clearly than their words, the depth of their concern. I assure them that I shall draw what they have said to the attention of my right hon. Friend the Chancellor, but I


must mention the cautionary words of my right hon. Friend the Prime Minister. It might well be wise not to assume tax reductions of any sort until they are delivered.
My hon. Friend the Member for Hertford and Stortford mentioned tax and social security integration. He has passed me a note explaining why he had to leave the House and go home.

Mr. Jeremy Corbyn: He is tired.

Mr. Major: The hon. Gentleman might well be right, but that is not the explanation that my hon. Friend gave in his most courteous note.

Mr. Corbyn: Tell all.

Mr. Major: Discretion is occasionally by far the better part of valour. Perhaps that is true on this occasion.
My hon. Friend the Member for Hertford and Stortford will know that we have announced steps that will lead to closer co-ordination between the tax and social security systems. The move to an April benefit uprating is clearly important in that context. At a practical level, we are ensuring compatibility between the computer systems being developed for tax and benefit offices.
The plan announced in the social security White Paper to pay the new family credit with wages represents a small but important step towards closer co-operation between the two systems. If we are ever to have closer integration, payment through the pay packet is an essential first step. Consideration of what further steps to take will have to await the Green Paper on personal taxation, which will appear in the next few months.
I have so far talked of only one side of the incentives equation. We are not trying to improve the incentive of the low paid only through improvements in tax and contributions, desirable though they may be. We are taking important new initiatives to provide help in other ways. Perhaps the most important example is the new social security structure, including the family credit scheme for low-paid working families with children, which we announced in the White Paper earlier this week.
I am grateful to my hon. Friend the Member for Suffolk, South for his warm welcome of the scheme. We believe that family credit will be a significantly more generous and better targeted benefit than the family income supplement which it will replace. We estimate that it will reach about 415,000 families—rather more than twice as many as those which receive FIS.
The levels of benefit will also be significantly more generous than the levels of benefit for FIS. A couple with two young children, and gross earnings of £110 a week, receive £4·50 a week FIS, plus free school meals or milk. Under the family credit proposals they would receive £17·40 a week—a substantial improvement. That illustrates that working families with children emerge from the reform package announced earlier this week as clear gainers, even when the changes in housing costs are taken into account.
I shall make that clearer with two brief examples. First, a couple with two young children who rent their home and earn £110 a week, would gain £10·45 a week net from the changes, even when their housing costs are taken into account. Secondly, a couple on the same gross earnings who own their home and have two older children would end up £8·15 a week better off overall. It is beyond dispute that those are substantial gains.
The social security reforms will be seen in due course to do a great deal to improve work incentives, especially by minimising the unemployment and poverty traps, and maximising the advantages of work, even work at relatively low pay. I am grateful to my hon. Friend the Member for Nuneaton for his kind words about the White Paper.
One attractive aspect of the reform proposals is that they significantly ease the unemployment trap by creating a better balance between the help available to familis in and out of work. One element of the reform of housing benefit, for example, is designed to ensure that the same level of help goes to recipients at a given income level, whether in or out of work. As hon. Members will be aware, at present unemployed people on supplementary benefit generally have their rent and rates paid in full. However, the assessment of housing benefit payable to employed people with precisely the same level of income is based on only 60 per cent. of their rent and rates. That is clearly a curious and unfair anomaly, which will be corrected under the new proposals, under which assistance will be given with up to 100 per cent. of rent and 80 per cent. of rates, whether in or out of work.
The major element, however, is ending FIS and replacing it with family credit. The merits are clearly illustrated by the examples that I gave about the net disposable income of families under the two schemes. My hon. Friend the Member for Oxford, East spoke with feeling about high marginal tax rates. He will be pleased to know that the White Paper reforms also end the worst aspect of the poverty trap—that absurd circumstance where reduced benefits, together with higher tax and national insurance contributions, can leave a family worse off overall when it increases its gross earnings.
This major improvement in work incentives will be achieved by assessing entitlement to both family credit and housing benefit on income after tax and national insurance contributions have been taken into account. Similarly, by replacing benefits in kind with cash we will not only enable working families on low earnings to provide for their families in the same way as their more highly paid colleagues, but we will end the particularly acute poverty trap problems which now arise when earnings reach the point at which entitlement to passported benefits ceases.
I recognise that by eliminating marginal tax rates of 100 per cent. or more, which are absurd and have been widely criticised, not least this evening, and which the reforms will achieve, and by providing help to a wider range of families, more families will face marginal tax rates below 100 per cent. but still, alas, at relatively high levels. As I think most commentators and every hon. Member will recognise, that is probably unavoidable if we are to target more of our available resources on those most in need.
I should add a brief cautionary word about some of the estimates that we have seen in the press about the numbers likely to be affected. The number of families with children on marginal tax rates of 100 per cent. or more would decrease from about 70,000 to nil, while the number with rates of 90 per cent. or more would fall from about 130,000 to about 40,000. The number with a rate of 70 per cent. or more would not surprisingly, increase from about 240,000 to about 490,000.
The White Paper proposals will also significantly improve the climate in which decisions on whether to work, and how hard to work, are taken. In place of the present complex range of benefits, the reforms will


establish a simpler structure in which the advantages of work will be self-evident. Few families would have any advantage in remaining unemployed. Once in work, it would always pay a family to increase its effort and its earnings.
Paying the family credit with wages will not only take a significant step towards the closer harmonisation of tax and social security but will make more visible the relationship between work and the total income, including the credit, which can be derived from work. It will end the absurd position where a family on relatively low earnings is paying substantial sums to the state in tax and contributions with one hand, while receiving family income supplement from the state with the other. We estimate that about 60 per cent. of family credit recipients will have their tax and contribution payments offset in whole or in part; the rest would have them offset and receive a net payment on top.
The prize of this reform is considerable: a simpler structure in which present disincentives are removed and in which enterprise and effort will be fostered and encouraged. Whatever differences we may have on some other aspects of policy, that must be the way forward. I hope that my remarks show that the Government are deeply aware of the need to improve incentives for the low paid. More important, I hope that I have shown that the Government have taken, are taking and will take across-the-board action to achieve that end. I hope that in that action we shall have the broadest possible support from the Opposition, where they can obtain it, and from my hon. Friends without exception.

Ports of Entry

Mr. Jeremy Corbyn: I was about to say that a debate on the treatment of visitors at ports of entry and the rights of Members in this matter is timely, but I can think of nothing that is timely at 5·16 am, except perhaps for breakfast in bed. But the public anxiety that has been increasingly expressed about the way in which the ports of entry system operates, the operation of immigration controls, and what I believe to be a scandalous letter sent by the Minister of State, Home Office, to my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman), who is the shadow Home Secretary, must be answered. It is an indictment of this place that it has taken an Adjournment debate for the matter to be raised and for the Minister to have the opportunity to answer directly in the House the charges that he levelled against hon. Members in that letter.
It is worth recording that the background to this is a continuing process, since at least the 1950s, of increasingly tight immigration controls, increasingly overt racist reasons for those controls being introduced, and increasingly racist pressure in the media to introduce those controls. I am thinking of the atmosphere surrounding the Immigration Act 1962, and the disgrace surrounding the Immigration Act 1968, when the unlamented former right hon. Member for South Down made his notorious speech. Perhaps the most racist of Immigration Acts was the one passed in 1971, which introduced the concept of patriality or non-patriality.
The system of entry clearance for people arriving in Britain, mainly from the subcontinent, was introduced in 1969. It is clear from a briefing paper that was presented to Ministers in 1983, and was leaked and subsequently published in the April 1985 bulletin of the Joint Council for Welfare of Immigrants, that the horrendous queues for interviews in Dacca, Delhi and Islamabad is a deliberate act of immigration policy. It states:
The system of queues operates to regulate the flow of immigrants … the number of entry clearance officers … is the primary regulator of the number of husbands, wives, and children, and male fiances admitted from the sub-continent in any one year … Provided the queues do not become too long this form of administrative regulation can continue, but an acknowledged policy of deliberate delay without legislation giving power to impose quotas would run risks in the domestic courts and under the European Convention on Human Rights.
That was the secret advice to the Government in 1983, and it has proved to be correct.
It would be helpful if, in his reply to the debate, the Minister gave a clear answer as to what he intends to do about the Commission for Racial Equality report into immigration control. When it came out in February this year, he rushed into print to say:
The detailed recommendations in the CRE Report will receive careful study, but it is fundamentally flawed in that throughout it fails to face up to the fact that there is more pressure to emigrate from some countries than from others. To deny this flies in the face of common sense. It is inevitable that more people from some countries will try to enter Britain when not entitled to do so than from others and more will be refused admission. The fact that nationals of Ghana, Morocco and Turkey are more likely to be refused than people from Canada and New Zealand reflects the reality of pressure to emigrate, not a biased system of control. In getting this wrong the Report misrepresents the way the control has to operate.


He went on to claim that many of the report's conclusions were unrealistic, and that little attention had been paid to the potential cost in it.
The Minister is clearly speaking for the Government in that quote, and shows clearly that he believes that the problems of immigration should work for the administrative convenience of the Home Office and of politicians such as himself rather than face up to the awful problems that divided families suffer in Bangladesh and many other countries. That should be at the heart of the debate. Within this context, there must be discussion about the number of passengers refused leave to enter the United Kingdom. In 1984, 18,096 were refused, an increase of 23 per cent. over 1983. The Home Office states in the Immigration and Nationality Department report in July this year that that was
0·14 per cent. of the total subject to control.
However, if European Community nationals, returning residents, work permit holders and those coming for settlement with entry clearance are excluded, the figure of those excluded nearly doubles, to 0·27 per cent., which is three in every 1,000. For passengers from the sub-continent, the figure is significantly higher—3,891 refused leave to enter in 1984 out of 278,340 arriving for purely temporary purposes, or 14 in every 1,000.
For citizens of Bangladesh coming in at terminal 3, 684 were refused entry in July, August and September this year compared with 72 in the equivalent months in 1984. However, it is difficult to know the accuracy of these figures without knowing the total number admitted through terminal 3 in the equivalent period. The reason for the sharp increase in the number of visitors from Bangladesh appears to be linked to the changes in immigration rules, to which the Government's attitude is disgraceful. They do not appear to have accepted the spirit of the European Court judgment, despite it having been handed down in a clear way after a fair hearing given to the British Government.
The role of Members of Parliament in immigration matters is important, particularly for those who represent constituencies in which a large number of people have their origins in the sub-continent, west Africa or the Caribbean, areas such as those that I represent, or my hon. Friend the Member for Battersea (Mr. Dubs) and many others of us who represent inner city areas. We represent communities that have origins far from here, and inevitably many people wish to visit. The heartache and despair that the system of controls at ports of entry causes them should not be underestimated, although it is seldom reported in the newspapers.
In 1984 the proportion of passengers from the New Commonwealth and Pakistan who were refused entry was higher than ever. There has always been a significant difference between the proportion of passengers who are nationals of third world countries who are refused entry and the proportion of those from the rich, predominately white countries who are refused entry. For example, in 1984 a passenger from Ghana had a one in 22 chance of being refused, but only one in 8,980 passengers from Canada were refused entry. Between 1979 and 1983, 71 passengers in every thousand who were travelling with New Commonwealth or Pakistan passports were refused entry. In 1984 there was a 32 per cent. increase: 94 in every thousand passengers were refused entry. The figures for the first quarter of 1985 suggest that the increasing trend of refusals has continued.
The role of hon. Members is quite important. An hon. Member has the right to intervene if somebody has been refused admission. He cart place a stop upon removal. After discussion with the private office or with the immigration officials he can secure temporary admission so that a particular person may enter the country. In many cases people want to come to this country only for brief holidays as tourists or to attend weddings. Those are perfectly reasonable, right and proper things to do. I have lost count of the number of times that very respectable, middle aged people have telephoned me in absolute desperation because a long expected brother or sister was being held at the airport, for no apparent reason, and in some cases being treated with no courtesy whatsoever.
In that sense, the role of hon. Members is particularly important. However, hon. Members also have a role to play in supporting asylum and refuge seekers. The reaction of the Government earlier this year—a reaction that continues—to Tamil asylum seekers has caused and is still causing considerable concern. I refer the Minister of State, Home Office to Mr. Poul Hartling's lengthy statement and report that was made earlier this year on behalf of the United Nations High Commission for Refugees. It compares the attitude of Europe towards refugees with the attitude of very much poorer third world countries.
One of the underlying issues in this debate is the famous letter that was sent to my right hon. Friend the Member for Gorton on 28 October 1985. It is a six-point letter and in it the Minister of State sets out what he considers to be the problem about the involvement of individual Members of Parliament in immigration cases. First, he wonders whether it is right for hon. Members to ask for a stop to be placed upon the removal of passengers without any inquiries being made into the merits of the case. That is a remarkable statement for any Minister to make. If somebody is to be removed from this country—sometimes with less than six hours notice having been given to the Member of Parliament—there is insufficient time in which to make detailed inquiries One has to form a judgment on the spur of the moment. There is no other way to do it, otherwise that person may, quite wrongly, be removed. What is wrong about it is that only Members of Parliament are able to intervene in such cases. There ought to be an appeals procedure in this country, to deal with that problem—if, indeed, it is a problem.
The Minister's second objection to the involvement of hon. Members in immigration cases is that they may put a stop on a case and then not turn up to make representations. I do not think that this is a particularly common practice. I am certain that there have been occasions when Members of Parliament have placed stops on people to prevent them from being removed from this country but have then been unable to make representations because they have not received the necessary details. I am certain that in most of those cases the individual Member of Parliament informs the Home Office that he no longer wishes to pursue the case. What is particularly scandalous about this letter is that it deliberately raises the ogre of the involvement of Members of Parliament in immigration cases.
The Minister's third objection relates to the allegation that Members of Parliament take up the cases of constituents other than their own. The fourth allegation is that they are involved in the "poaching" of particular cases from other Members of Parliament. There are two answers


to those allegations. First, Members of this House are Members of Parliament as a whole. They are dealing with the Executive as a whole. Therefore, they have the right to take up those cases and intervene. Secondly, and of equal importance, it is known that a number of hon. Members refuse to take up immigration cases because they are not prepared to support people who have problems with the immigration authorities.
Some hon. Members refuse to take up immigration cases and some are not prepared to support people who have problems with the immigration authorities. What are constituents supposed to do if their Member of Parliament holds extreme views about the ethnic minorities?
The fifth allegation by the Minister is that hon. Members communicate with people abroad telling them that if they are refused entry they should contact an hon. Member who will take up their case. Since the decision by immigration officers and the Home Office in many cases is so arbitrary, why on earth should not people try to contact an hon. Member? If they do not, they will be sent wrongly and unfairly out of the country. It is essential that we retain that right.
The sixth allegation is that hon. Members have been inviting people to bypass the immigration system. The Minister makes that allegation because he knows what the gutter press will pick up, but he knows that the allegation is incorrect. He knows the work which hon. Members do and he must also know the pressure on hon. Members to deal with immigration matters. I do not know how many staff he has to deal with all his responsibilities, but I am sure that he has many more, in proportion to the number of cases than any hon. Member. I have one full-time assistant and one part-time assistant. Independent advice is given to me by lawyers and the local law centre. Without their support, many cases would not be dealt with. It is disgraceful that when dealing with the Tamil asylum-seekers earlier this year the Minister insisted on the 24-hour representation rule. If he plans the same for people from Bangladesh or anywhere else, he should tell us now, in public, rather than wait for the Christmas recess.
We want an explanation of the Minister's incredible request that the details of cases in which some hon. Members have been involved should be released by him to the public. I have thought about the matter, as have many other hon. Members. It is incredible that the Minister should say that private correspondence concerning intimate details about constituents and other people's family lives should be released for public consumption. That is wrong, and I am totally opposed to it. Such a step would break the confidence between an hon. Member and the people who go to see him.
The visa requirement for people from Sri Lanka is important. Communal problems in Sri Lanka go back many years. They culminated in serious violence in 1983 and enormous fear among the Tamil community between 1983 and early this year. For some extraordinary reason the Government started saying early this year that the situation in Sri Lanka had improved and that some Tamil asylum-seekers wishing to come here were economic, not political, refugees. The Government then said that representations about Tamil arrivals had to be made in 24 hours and imposed visa restrictions on anyone arriving

from Sri Lanka. That happened during a bank holiday weekend. The issue was finally debated in the House a couple of months later.
We require to know two things of the Minister. First, will he lift the visa requirement on people leaving Sri Lanka? It is unprecedented to require visas for travel from a Commonwealth country to the United Kingdom. Secondly, are there any plans to introduce visa requirements for people travelling from Bangladesh to this country? We need an answer to that quickly because many people are extremely worried.
Presumably the Minister's concern stems from the fact that the number of representations made by hon. Members about citizens from Bangladesh arriving at terminal 3 was 360 during July, August and September of this year compared with 16 in 1984. That increase is indicative of the way in which many people in Bangladesh—people who have every right to come here under our existing immigration laws to join families—are worried about the present position. The Minister is simply seeking to augment the disgraceful queue in Dacca of people trying to get an interview with the high commission staff, and hence the visa requirements that he is imposing.
I must comment on the way in which the press report immigration matters, and especially their handling of the so-called "immigrant loophole" concerning Bangladesh. The Times on 27 November last, under the headline "MPs move to close immigrant loophole", stated:
A legal loophole is allowing Bangladeshi husbands settled in Britain to be joined permanently by two or more wives and all their children from abroad, a Commons inquiry has revealed. Up to 25 per cent. of married women now applying in Bangladesh to be united with their husbands in Britain are, in fact, the men's second wives, MPs were told during a recent fact-finding tour of the Indian subcontinent. The Commons Select Committee which is carrying out an investigation into immigration procedures is almost certain to recommend that the loophole be closed immediately, and the Home Office is likely to agree. Conservative MPs who visited Bangladesh were horrified by what they discovered, and believe, if left unchecked, it will result in a substantial increase in immigration. They alerted Home Office ministers immediately they returned home.
A few days later, The Times reported on 3 December a story under the headline "MPs scale down claims on immigrant wives." The story, written by a different reporter, read:
'We have now received the most recent figures, and between January and August 1985. 15 per cent. of applications fell into the "other wives" category, and this would include marriages where the first marriage has ceased through divorce or death,' the chairman of the committee said".
The more appalling newspapers in Britain played up a huge story about alleged vast numbers of second wives arriving from Bangladesh as a means of encouraging the Minister to introduce visa requirements for people arriving here from that country. The way in which newspapers report immigration matters is a serious aspect of this whole issue.
If the newspapers and others want to be fair, they should make it clear that the number of refusals of applicants wishing to come here within the existing law is much higher from the Indian subcontinent than from any other part of the world. Hon. Members' rights in this matter are vital. If those rights were curtailed, what resources would those turned back at the airport—often by arbitrary decisions and frequently in conditions of insufficient translation facilities for people whose first language is not English—have?
It is essential for the Minister to withdraw the disgraceful letter that he sent to my right hon. Friend the Member for Gorton and to make it clear that he has no proposals to interfere with the rights of hon. Members to take up immigration cases. Visa requirements applying to people wishing to come here from Sri Lanka must be withdrawn and he must assure us that he has no plans to impose visa requirements on people arriving from Bangladesh or elsewhere.
Newspapers often report immigration matters in an extremely racist way. They give the impression that we should have tight controls, with the atmosphere being difficult for people arriving here from west Africa, the Caribbean and the Indian subcontinent.
The same does not apply to arrivals from Australia, New Zealand, the United States or anywhere else. If visitors from those countries were treated in the way that Bangladeshi arrivals in Britain are treated, there would be an almighty uproar and it would stop immediately. But because those people come from the subcontinent, often poor people coming from poor countries, it is apparently fair game for them to be treated in that way. I hope that the Minister will be able to give us some comfort on the matter, although I fear that that is a faint hope.
Those of us who represent inner-city multicultural communities are proud to do so and we feel that the way in which those communities live in fear of the immigration rules and the problems that they suffer because of the way in which those rules operate are disgraceful. It is discriminatory in our society and it is a blot on any form of civilisation. I hope that in his reply the Minister will at least say that the situation will not get worse, although I fear that it might well.

Mr. Alfred Dubs: I am pleased that my hon. Friend the Member for Islington, North (Mr. Corbyn) has managed to secure this debate, because it gives us a chance to raise some of the issues which have been bothering hon. Members for some time. I only regret that at this hour of the morning we do not have the benefit of the presence of as many hon. Members as at a more sensible and civilised hour.
Britain benefits enormously from visitors, and most of us feel that they should be made welcome. In 1984 Britain had nearly 6 million visitors, and of those some 17,300 were refused entry. That represents one in every 446. But we all know that the proportion of refusals is much higher for visitors from the New Commonwealth and Pakistan.
Between 1979 and 1983 there was a refusal rate of 71 in every 1,000. Last year, 1984, that went up by about 32 per cent. So the refusal rate from those countries reached 94 in every 1,000. I visited Heathrow airport to look at these matters a few months ago and every person who was stopped there that morning for further questioning, possibly to be refused—I did not stay long enough to discover that—was non-white.
The report of the Commission for Racial Equality referred to by my hon. Friend a few moments ago gave a lot of evidence as to the nature of the discretion exercised by immigration officers and contained a number of alarming suggestions and evidence that discrimination was taking place at the point of entry to Britain. That is something that many people have known for a long time, but the commission made it pretty clear in its report. I repeat the question asked by my hon. Friend: does the

Minister intend to take any action on the many recommendations in that report, or will it be allowed to collect dust on the shelves?
It has long been accepted that hon. Members may seek to prevent the departure of a visitor while representations are made to the Minister. In 1979, of all those who were refused entry 23 per cent. were granted temporary admission, not always by Members of Parliament. We do not know what proportion of temporary admissions were secured by Members of Parliament. Some are granted by officials. But by 1984 the figure had increased to 49 per cent. Again, we do not know how many of those were granted as a result of representations by Members of Parliament.
I managed some time ago to have a discussion with some immigration officers and we were talking about the practice of Members of Parliament making representations on behalf of visitors refused admission. The immigration officer said something which I found rather disturbing, particularly in the context of the letter which the Minister then wrote to my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman). The immigration officer said, "Ah well, we refuse. We know that MPs will make reps. The visitor gets a few weeks while the Minister decides. The Minister then supports our refusal to allow entry, so our position is upheld. The MP has made an impact, the visitor has got here and everybody's satisfied." There is a strong implication that more people are refused because immigration officers know that Members of Parliament are likely to make representations and, as the immigration officer put it, honour is satisfied all round.
Honour is not satisfied all round, because the situation becomes absurd. Of course Members of Parliament will be involved because we believe that some of the refusals are wrong and we want to give our constituents and their families the chance to make visits. If immigration officers act as was suggested to me, there are bound to be even more refusals and Members of Parliament are bound to be involved even more. If immigration officers were more objective in their assessments at Heathrow airport and elsewhere, as the CRE report suggests they should be, Members of Parliament might not be involved so often.
I should like to take this opportunity to express thanks to the staff of the Minister's office, who are not responsible for the policy but have been unfailingly helpful and diligent whenever I have phoned them. I exonerate them entirely from blame for the policies that they are asked to administer and for which, as civil servants, they have no responsibility. Many of my colleagues have had the same experience and we should like to put that tribute to the staff on record.
The Minister of State caused great alarm and consternation when he wrote the letter about the 23 Members of Parliament—the "Waddington 23" as they have come to be known. I wish to ask some questions about that. First, where did he get the list from? The Home Office has said several times that it cannot file individual immigration cases by the name of the Member who raises them. The Minister looks puzzled, but I believe that that is right. How, then, did the Minister obtain that list? Did he simply say, "Dig out some instances so that I car have a go at them," or did the list come from somewhere and, if so, over what period was it compiled?
As the Minister knows, the immigration service union made representations to him, or certainly went public, objecting to the system whereby Members of Parliament


made representations and saying that it should be ended. That report from the union executive came out just before the Minister raised the whole matter of Members allegedly abusing the system.
Earlier today the hon. and learned Member for Burton (Mr. Lawrence) received a written answer from the Home Secretary in reply to a question relating to this issue. The question was:
what response has been received from those hon. Members referred to in his statement of Tuesday 29 October about representations made by right hon. and hon. Members in immigration cases; and if he will make a statement.
I shall not read out the whole answer as it is rather long, but I will refer to some of the points in it because I find it quite disturbing.
The reply mentions that there were 23 Members and then states:
Individual replies have been received from 12 hon. Members out of the 23.
That related to the possibility of their names being made public.
Many of us discussed some time ago our attitude to publication. We had no objection to publication provided that one condition was met—that there should be a full debate in the House to give all Members whose names would be made public the opportunity to put their side of the case. If we simply agree to the Minister publishing our names, he can make all his criticisms and many of the hon. Members concerned will never have an equal opportunity to reply to the allegations. Thery are fairly serious allegations and any fair-minded observer will see that it is reasonable to agree to publication only on condition that we can have our say. That is perfectly clear, fair and reasonable.
The Home Secretary then talks about holding discussions about the way in which Members of Parliament can make representations in such cases, but he does not say with whom. Is he talking about all 23 hon. Members or about some of them, or is he suggesting a full debate in the House on a Government motion?
The point that alarms me most of all is that the answer states:
The aim of these discussions should be to agree upon a Code of Practice which can be applied to the general run of immigration cases and which achieves a sensible balance between the rights and privileges of hon. Members to make representations on behalf of their constituents
and so on. That is an extraordinary suggestion—that there should be a code of practice governing the way in which Members of this House act on behalf of their constituents. If the Minister does not have a copy of the answer, I have a spare copy which I shall be happy to give him.
Are we to be told how to act as Members of Parliament on behalf of our constituents? Are we to be told how we shall do our jobs? Will there be codes of practice on how we raise matters relating to housing, social security and so on, or will this code of practice be confined simply to making representations in this area on behalf of our constituents and their families? I hope that there will be an early withdrawal of that suggestion. It is quite objectionable and comes near to being a breach of privilege. As it stands, and following discussions with persons unknown, we shall have foisted upon us a code of practice on how we should do our jobs.

Mr. Corbyn: So far as I am aware, in no other area of a Member of Parliament's work, either at national or local level, is there a code of practice on how that Member of Parliament should represent constituents. Does my hon. Friend agree that, if such a code of practice were introduced, it would be a serious infringment of the right of Members of Parliament to take up the problems of any constituents in future?

Mr. Dubs: I agree entirely with my hon. Friend. Had this matter been raised at Question Time, when the House is normally full, there would have been widespread consternation. The Home Secretary is saved from that anger only by the fact that we are discussing the issue at a ridiculous hour of the morning when the House is virtually empty. If the Government wish to limit the rights of Members of Parliament, they are embarking on a serious course, and I advise them not to do so.
The answer also talks about achieving
a sensible balance between the rights and privileges of hon. Members to make representations on behalf of their constituents and the need to maintain an efficient and effective immigration control in accordance with the Immigration Act 1971 and the immigration rules which have been endorsed by Parliament".
That again seems to be a new concept. We are talking about achieving a balance between our rights as Members of Parliament and the wishes of the Executive in dealing with a particular piece of legislation. It is right that such a balance should be achieved as a result of debate in the House, but it is quite wrong for the Home Secretary to suggest that he will foist this type of balance upon us. This is an attempt to deny hon. Members the traditional rights which for many years they have used on behalf of their constituents. I hope that the Government will abandon that silly idea.
Some wider underlying issues were referred to by my hon. Friend. Why is it that the Minister of State and the Home Secretary do not wish us to proceed as we have done before? We have said on countless occasions that we object to many aspects of the rules under the Immigration Act 1971. We have also said that we object to the way in which discretion is exercised at points of entry to the United Kingdom, as regards those who require entry certificates or visas, where discretion is exercised at High Commissions and other posts abroad.
There was considerable consternation when the Minister imposed visa requirements on people coming from Sri Lanka, mainly as refugees, earlier this year. That was provoked because about 1,200 people arrived in May, and visa requirements were established.
Even more alarming is the clear hint from Ministers that they are considering the imposition of visa requirements on people from other countries, of which Bangladesh is the most obvious. I know that nothing positive has been said, but many of us fear—the question has been raised in the House in the past few days—that a visa requirement will be imposed on people possibly from Bangladesh and other countries and that the decision will be made after the House rises on Friday. If the Minister were to embark on that course, it would have horrific implications for the posts abroad and for people wishing to come here. The Minister knows that people coming here for settlement have to wait two years for their first interview in Dacca and about one year for a first interview in Delhi. It would require an enormous increase in staff at those posts to deal with the large number of visitors from those countries.
Many of us would welcome an increase in staff to reduce the great waiting time that is keeping families divided, but the thought that thousands of normal visitors would have to be processed in that way is not one that anyone can be happy about. It is liable to cause great upset and to prevent many visitors from coming to the United Kingdom. I hope that the Minister will have none of it and that he will not seek to extend the visa requirements to any other Commonwealth country.
As I said earlier, if the Minister wants us to allow our names to be used in relation to the serious allegations that he made about abuse of our position, I hope that he will arrange with the Leader of the House for a full and frank debate. Then our names can be publicised. But all those who have been concerned will go on acting for our constituents in the best way possible. We shall not be deterred by threats or intimidation from the Treasury Bench as to how we should do our job.
We are far more concerned about the rights of our constituents than we are about the niceties of whether the Minister finds the way in which we make our representations somewhat inconvenient for him. I do not want to go into the details of all the so-called abuses, but he is going the wrong path. I hope he will stop this silly nonsense and allow us to continue to make representations on behalf of our constituents in the way that we have always done.

The Minister of State, Home Office (Mr. David Waddington): Despite the hour, I am grateful to the hon. Member for Islington, North (Mr. Corbyn) for raising this matter, because it gives me the opportunity to clear the air a little.
The vast majority of people arriving at our ports of entry pass through immigration control with the minimum of fuss and bother. On average, it takes about a minute to examine a passenger who needs formal leave to enter endorsed in his passport. The vast majority of people are granted leave, as was made clear by the hon. Member for Battersea (Mr. Dubs). I repeat the key figures: in 1984, only 0·14 per cent. of all passengers in the United Kingdom were refused entry. That means that 99·86 per cent. were admitted.
The refusal rates in the case of some nationals were higher than for others, for the obvious reasons that I set out in my reply to the report produced by the Commission for Racial Equality. I do not resile at all from my criticisms of that report, because I think that it is absurd to deny that there is far more pressure to emigrate from some countries than others. It would be amazing if one found the same refusal rates in the case of all nationals and people living in countries where there were very much lower standards of living than in the West. It would be surprising if one found that there was not a greater desire in those countries to beat immigration control than in more prosperous countries than ours.
In 1984 the refusal rate for Ghanaians was 4·3 per cent., which was far higher than any refusal rate for the Indian sub-continent. For Indian nationals, it was 0·9 per cent., for Bangladeshis, 1·7 per cent. and for Pakistanis, 1·3 per cent. That means that, taking the Indian sub-continent as a whole, 99 per cent. of passengers were admitted and 1 per cent. were refused.

Mr. Corbyn: Is the hon. and learned Gentleman talking about all the arrivals from those countries, or about people seeking to settle here to join their families, and so on?

Mr. Waddington: I am talking about all arrivals from those countries.
I am often asked to review refusals as a result of the intervention of hon. Members. When I am asked to review refusals, I write to the Members of Parliament concerned, setting out, if I am upholding the refusal, the reasons for the refusal. I do not think that any impartial observer would say that such letters do not clearly set out why the immigration officer has refused entry and provide evidence that refusals are made lightly and without suspicious circumstances coming to the notice of the immigration officer.
Of those refused entry, a high percentage are granted temporary admission—more than twice as many as during the years of the Labour Government. In 1977—I take that year because the figures are cited in the report by our immigration and nationality department—2,868 passengers were granted temporary admission; in 1984, the figure was 8,527. There was an increase in the number of people granted temporary admission, from 22 per cent. to 47 per cent.
This year we have had problems at Heathrow. At certain times, people arriving at terminal 3 have had to wait far longer than we would have liked before reaching the control. People who have had to go through more than the normal routine check have had to wait much longer than we would have wished for that further examination. There have been a number of reasons for that. There has been, year on year, a considerable increase in traffic—an increase of 10 per cent. this year on 1984. There has been a continuing tendency for the vast majority of flights to arrive between 6 o'clock and 10 o'clock in the morning, which makes life difficult for our staff. From July this year, there was an unprecedented increase in the number of Bangladeshis arriving who clearly were not qualified to enter under the rules. That resulted in 1,003 refusals in July, August, September and October, compared with 109 during the same months in 1984.
No one will say that that increase is due to new criteria being applied by the immigration officers, and no one will say that it is due to nefarious instructions given by myself. There must have been a dramatic change in the character of the traffic. The immigration officers were applying exactly the same rules and the same criteria and finding themselves obliged during those months to refuse entry to 1,003 passengers compared with 109 the previous year.
The increase in refusals, and Members making representations on behalf of those refused entry, has meant that immigration officers have had to be removed from the initial control to do other work which follows the initial refusal of an application by a passenger to enter. I ask hon. Members to bear that in mind. I am not saying that it is the most important factor of all, but we would be foolish if we did not recognise that an increased number of Members' representations as a result of refusals has an effect on the burden of work, and means that immigration officers who could be standing at the desks speeding up the process of clearing passengers through the control are doing other work.
We hope that things will be better this coming year. There is reason to think that the opening of terminal 4 next spring and the new staff provided for the new terminal will bring about an improvement.
I am greatly concerned about the irresponsible statements which are made from time to time about our immigration officers. I am grateful to the hon. Member for Battersea for what he said about the staff in my private office, but I wish that sometimes Labour Members would hand out similar bouquets to immigration officers, who have an extremely difficult job to carry out and who, in my experience, undertake it with great skill and courtesy.
I am not talking only about the allegation of the hon. Member for Islington, North that people are treated with no courtesy whatsoever, although I think that the officers are entitled to resent that sort of comment. I am thinking especially of a disgusting cartoon which appeared in The Guardian the other day, in which an immigration officer was depicted as a Hitler-like bully, complete with toothbrush moustache, about to dish out physical punishment to an Asian couple waiting to be admitted. That cartoon accompanied a letter giving an entirely distorted account of what had happened when two elderly people had arrived at Heathrow. If I were an immigration officer, I would find such attacks on the service, made by what is supposed to be a responsible newspaper, grossly offensive. I know from my own experience that these attacks are unfair.
An entirely false picture has been painted by those who apparently resent immigration control. The speech of the hon. Member for Islington, North suggested that he and those who think like him come close to resenting any immigration control. When I was at Gatwick the other day, one of the things which struck me was how many young girls we have in the service. They do not have toothbrush moustaches like the man depicted in The Guardian cartoon. They are the sort of young people that we are fortunate to have in the public service. The one that I saw the other night would be well known to hon. Members as she was in my private office until recently. Her parents came from Pakistan.
When complaints are made, they are investigated thoroughly, but we do not receive that many. When hon. Members and others take the trouble to go to Heathrow to see what happens, they almost invariably return pleased with what they have seen and ready to admit that standards are high. I hope that we shall lend no support to those who shower abuse on the service, and will tell our constituents that the immigration officers are doing their best to apply rules approved by Parliament, which have not changed towards visitors since a Labour Government were in power.
I also hope that there will be a readier recognition by thinking people that, as an island, we would be very foolish if we did not have firm control at our ports of entry. We can concentrate the control at our ports of entry because we are an island. The alternative of pervasive after-entry control, perhaps with identity cards, is far less attractive.
The comments of the hon. Member for Islington, North about heartache and despair caused by the system of control at the ports of entry should be considered against that background. I repeat that we are fortunate to be an

island people and therefore able to concentrate our control at the ports of entry and not have pervasive after-entry control.
My right hon. Friend the Home Secretary has already answered a quesion about representations by Members of Parliament. He said that we should proceed with discussions to work out a better system. I do not believe that it would be sensible to dwell too long on what has been happening up to now and to debate whether particular practices have been very bad, not so bad or all right. Almost eveyone would agree that the system has not been working as it should. Indeed, in an unguarded moment, the hon. Member for Battersea described as absurd the way in which it worked in one regard. Surely the point is to discuss the arrangements for the future.
A number of helpful suggestions have been made, and I hope that the hon. Gentleman will also make some. There is no reason why we should not bring about an improvement that will achieve the right balance between the rights and privileges of hon. Members to make representations and the need to maintain an effective and efficient immigration control in accordance with the Act and the rules.

Mr. Dubs: The Minister said that I had said that the system was absurd, and that I did so in an unguarded moment. It was not that way. He quoted me a little out of context. I said that an immigration officer had once told me that, knowing that Members of Parliament will make representations, immigration officers make refusals, the Members of Parliament make the representations, the visitor is allowed to come into the country and the Minister then upholds the immigration officer's refusal. It is that aspect of the system that I described as absurd.

Mr. Waddington: I am sorry if I misunderstood the hon. Gentleman. However, it is now clear that he thinks that there is a connection between the number of representations made by hon. Members and the number of cases in which immigration officers grant temporary admission. I do not make that connection, but as he is making it we should look at the whole matter to judge whether the system is working properly.
I was asked two questions by the hon. Member for Islington, North that go wide of the debate, but I would not dream of ducking them. He asked about the possibility of visas being imposed on people from Bangladesh. The Government have no immediate plans for changes in the operation of immigration control, but they keep those arrangements, including visa requirements, under continuous examination and would not hestitate to take appropriate action if necessry. In saying that, I say no more than what Governments have said over the years—we should keep the operation of visa control under continuous review so as to meet changing circumstances.
The hon. Gentleman asked when we would lift the visa requirements on Sri Lankans. I am keeping the visa requirement under review, but I have no plans to withdraw it at present.
The hon. Member for Battersea asked me where I had obtained the list of 23 cases. I was aware of some cases where I thought that things had gone seriously wrong and I asked my officials to look through other correspondence and show me other illustrations of what had been occurring.
I hope that I have given some assistance to the House tonight. I am grateful to the hon. Member for Islington,


North for enabling me to clear the air on these matters. I hope now that we can soon proceed to useful consultation so that we can make some sense of the system of representations, by Members of Parliament which I freely acknowledge is an admirable institution.

Mr. Corbyn: I asked my hon. Friend the Member for Battersea (Mr. Dubs) whether he thought that a code of practice would be an infringement of the traditional relationship between Members of Parliament and any public department. Does the Minister accept that discussions of the nature that he is proposing would inevitably lead to the idea of a code of practice, which would inevitably lead to a quantified relationship between Members of Parliament and public Departments, which has never happened in this country and which I hope never will?

Mr. Waddington: Let us see where our discussions lead us. I do not want to be drawn into that at this time because it is sensible for us all to sit down and think about it. I hope that when we come back after Christmas, everyone who has a useful contribution to make will do so, so that we can improve the system to the advantage of all hon. Members.

Drunken Driving

Mr. Keith Best: I am pleased that we are having this debate, albeit at this time of the morning. It is therefore incumbent upon me immediately to say to my hon. Friend the Minister of State and to my hon. Friend the Member for Banbury (Mr. Baldry), who sits behind her so loyally, that I apologise for giving them such an early start. I hope that they will feel at the end of the debate that it has been fruitful and, indeed, necessary.
There is a ritual about raising the subject of drinking and driving just before Christmas. I make no apology for having sought to do so again, although we had a debate about the same time last year on the same subject. With Mr. Speaker's indulgence, I intend to continue to seek to raise the matter before Christmas every year, just as the Government feel that it is necessary to launch a campaign every year. It is sad and it should not be necessary to have a campaign every year or for an hon. Member to have to seek to raise the matter to give it greater prominence, but it is necessary because the weak, foolish, unwise and unwary and the ignorant still drink and drive.
One clear message that should go from the Chamber is, "If you drive, don't drink, and if you drink, don't drive." There can be no fetter on that simple message.
The number of drink drive offences over the past decade has gone up dramatically. In 1975 there were 65,000 cases, but by 1980 the number had risen to 78,000. By 1983 the figure was 98,000 and by 1984 it had gone over the 100,000 mark, to 101,000. Nearly half of all injuries to and deaths of drivers, passengers and pedestrians are attributable in part to alcohol, and drink is involved in 45 per cent. of fatal road accidents to young people. Nearly 100,000 people are convicted for drink drive offences each year in England and Wales alone, and the numbers are rising rapidly.
Many people think that there is a legal limit. There is no such thing. It is true that there are offences under section 6(1) of the Road Traffic Act 1972, amended by the Transport Act 1981—offences of driving or attempting to drive or being in charge of a motor vehicle with a blood alcohol concentration above the prescribed limit. Currently that limit is 35 mg of alcohol in 100 ml of breath, 80 mg of alcohol in 100 ml of blood or 107 mg of alcohol in 100 ml of urine. That should not be regarded as the entire law on the matter. That point will be well known to my hon. Friend the Member for Banbury.
There is still the old offence of driving or attempting to drive while unfit to drive through drink or drugs, or to be in charge while unfit. Any amount of alcohol impairs driving ability, and ability definitely deteriorates with more than 50 mg of alcohol. Unfit to drive in law means that the ability to drive is impaired for the time being. It does not mean incapable of driving. People concentrate far too often on the idea of a legal limit below which they are safe and not subject to any prosecution. That is wrong. It should be clear that people with alcohol concentrations far less than the prescribed limit can be prosecuted and convicted of being unfit to drive.
The impairment depends on the concentration of alcohol in the body, not on the amount taken. A person with high natural alcohol concentration is vulnerable. An 11-stone male is put over the 50 mg limit by one and a half pints of ordinary beer or three single whiskies. Driving


ability will be impaired. Even at the so-called legal limit under section 6, a person is five times as likely to have an accident than if he had not had a drink. A person could be arrested, charged and convicted under section 5, which is concerned with unfitness to drive, when well below the limit set out in section 6.
It is no good trying to do calculations. Indeed, it is extremely dangerous, because there are so many variables. The 1965 report of the British Medical Association's special committee said:
It takes between 15 and 90 minutes for the peak concentration in blood to be reached following a drink of alcohol, and in most cases little more than 30 minutes … In fact, the rate of elimination of alcohol both between different individuals and in the same individuals at different times varies to some extent and an exercise of this kind cannot, in our opinion, be justified.
The mean elimination rate appears to be between 11 and 21 mg per hour, but numerous recent studies have confirmed the extreme variability of the blood clearance rate. Significant numbers of clearance rates exceed or trail the average by factors of two or four and, in extreme cases, eight.
The law is much tougher after the Transport Act 1981. There is an automatic refusal to issue a driving licence to high-risk offenders or problem drinkers—that means drivers who are convicted twice in 10 years of drink driving offences when, in both cases, the blood alcohol level has been more than two and a half times the prescribed limit or a specimen has been refused, or a combination of the two.
It must be concluded that the public can feel safe only if such people are never allowed to drive again. That might be a hard judgment, especially if driving is necessary for employment or if employment depends on the ability to drive, but we must protect the innocent people who lose their lives or suffer terrible injuries as a result of others taking the risk of drinking and driving.
My hon. Friend has now launched a new campaign. We can but hope that it will be more successful than the disastrous "stay low" campaign last Christmas. Statistics to which I shall refer show it to have been disastrous. I believe that in retrospect, and I say "in retrospect" because my hon. Friend the Minister could say that I welcomed the campaign in the debate on 21 December 1984, as, indeed, I did. She will recall, however, that I also entered some caveats then. "Stay low" was a dangerous slogan which was taken out of context. As I said in that debate, it was wrong to consider the slogan without considering the whole press release of the Department of Transport. I read it in full then and I shall do so again. It stated:
Don't drink any alcohol at all if you are going to drive. That's the only way to be sure you won't be affected by drink and liable to be convicted of a drink-drive offence.
And it's the best safeguard you can give yourself that you won't be involved in an accident.
Although the 'breathalyser law' puts a limit of 35 microgrammes of alcohol per 100 millilitres on drivers' breath, you can still be prosecuted below that limit if a policeman thinks your driving ability is impaired by alcohol.
So the only way to be certain is not to drink. That's what the Department of Transport means by its advice to drivers this Christmas to stay low—very low.
If that press release had been reiterated, the campaign would not have been misunderstood. My hon. Friend the Minister, who is an experienced politician, knows only too well that politics is about slogans, and that many

comments made by hon. Members are often taken out of context. Indeed, our political history is riddled with slogans and statements taken out of context, which achieve a mythology of reality all of their own. I am thinking of cutting prices at a stroke and getting on bicycles. Many of them are entirely inaccurate as a representation of what was said, and are taken entirely out of context.
My hon. Friend and the Department must realise that with such a campaign people will pick out one aspect as theslogan and refer to it. That is why the slogan "stay low" was dangerous. It conveyed the impression that people could drink and drive, notwithstanding the full press release which said clearly that people should not drink and drive.
Why were there no consultations with the alcohol agencies before this present campaign was launched? Many organisations, particularly Alcohol Concern, feel that they can contribute to the formulation of these campaigns. Why was it felt inappropriate for those agencies to be consulted?
I hope that my hon. Friend will again say unequivocally that there is no legal limit below which a person can be regarded as safe to drive. Under section 5, the test of impairment of driving ability is not linked to any limit. The "stay low" campaign created a misunderstanding of the law because of the slogan rather than the full explanation. I hope that my hon. Friend will say that the only message that must be fully comprehended is that if one drives, one must not drink. That must be stated unequivocally.
The "stay low" campaign cost 1·5 million. How much will this year's campaign cost? The cost to the nation of drink-drive accidents is estimated to be £100 million a year, so £1·5 million is a small contribution to make to a campaign to try to overcome that tremendous cost. Will my hon. Friend explain to whom the campaign is directed? She said when the campaign was launched that it was especially directed towards the young, but perhaps she would use this opportunity to amplify that statement.
I greatly appreciate the excellent initiative that is taken by some organisations to try to increase public awareness of the dangers of drinking and driving. I am especially mindful of the new campaign by the Royal Society for the Prevention of Accidents, aimed at the licensed trade, employers, employees, young people, voluntary groups and operators of coaches, minibuses and taxis. I commend to the House and to the general public the excellent booklets that have been produced to increase public awareness, and especially to the various groups, to each of which is directed a separate booklet produced by the Royal Society for the Prevention of Accidents, which is a comprehensive and useful guide.
I am also especially impressed with the society's pamphlet, which is easily read and very short. It is entitled, "How to beat the Breath Test." It is one of the interesting leaflets which invites someone to read more, just as the leaflet that was produced by Conservative central office, which stated that "Conservatives admit to cuts", invited people to read more. That is shrewd advertising material, because it invites people to look more into the contents.
The booklet from the Royal Society for the Prevention of Accidents states:
Why shouldn't I drive after I've been drinking"?
The reply is:


Alcohol affects your own judgment of whether you are fit to drive or not—you may genuinely believe yourself to be driving better than you are. Alcohol is a depressant, not a stimulant. It lessens the co-ordination, lengthens reaction time, blurs vision and affects ability to judge speed and distance: all vital skills when it comes to driving. The ability to judge distance between moving objects is lessened when you are only one quarter of the way to the legal limit.
Another question asked is:
How quickly does it wear off?
The answer given is this:
Rates of absorption vary so much, the only sure way is to allow one hour per half pint of beer (or equivalent)—this can take several hours. Someone who has had a heavy drinking session the night before may still be over the limit going to work at 7 am the next morning!
All of us in the House know the sort of feeling of going to work at that time. Indeed, we have gone to work half an hour earlier than that this morning.
The pamphlet continues:
There are no tricks for sobering up more quickly—coffee and fresh air may help you feel better, but they don't reduce the alcohol level.
Another section asks,
But I won't be stopped if I drive carefully, will I?
To that, the answer is:
The police can ask you to take a breath test if they suspect you of committing a moving traffic offence, or if you're involved in an accident, but they can also stop you if they suspect you of having alcohol in your blood. If you're stopped for any reason, like a broken rear light, and they think you've been drinking, they can ask you to take a breath test then as well. You might even be prosecuted if you're not over the limit if you're clearly unfit to drive. The 'legal limit' just means prosecution is automatic.
I welcome the hon. Members for West Bromwich, East (Mr. Snape) and for Cumbernauld and Kilsyth (Mr. Hogg). It is especially commendable that hon. Members should come to the House at this time of the morning, and it manifests their belief in the importance of this debate, especially before Christmas. I appreciate that the new campaign that has been launched by my hon. Friend is much tougher and that the get-tough policy of the police will be supported, as I understand it, strongly by my hon. Friend and her Department.
I also appreciate the steps that my hon. Friend's Department has taken over another matter that I have raised during the year—the sale of alcohol through petrol stations. The steps that my hon. Friend has taken in the past year have been welcome. The fact that her Department is collecting statistics to establish the number of petrol station licences in existence is a positive step. This has been reinforced by the fact that the Home Office will, from next year, record such licences as a separate entry on the official statistics. I thank my Friend for what she is doing.
Stopping people from drinking and driving is not just a question of informing the public; there has to be an element of deterrence as well. I feel that still the message has not got across to people that if they drink and drive and are prosecuted and convicted for having an alcohol level beyond what is prescribed, they will lose their licence automatically. However persuasive, even as persuasive as my hon. Friend the Member for Banbury, an advocate can do nothing in those circumstances to save a person's licence. It does not matter whether his job depends on being able to drive—the licence will be lost for 12 months as a minimum. I hope and pray that that message gets across, because it is all part of the concept of deterrence.
I believe, and I suspect and hope that all agree, that the only real deterrence is the certainty of being caught, and at the moment the likelihood of being caught in the United Kingdom is low. The Home Office has stated that only one in 250 drinking drivers has a risk of being caught. That is an appalling statistic, and it must be changed. I accept that I should not be addressing my remarks principally to my hon. Friend the Minister, but I hope that she will convey them to the appropriate quarters, because that needs to be looked at carefully.
I know that my hon. Friend has heard this question before, not least from Mr. Don Steele, of Action on Alcohol Abuse, but I ask her to look again at this suggestion. Bearing in mind that those with provisional driving licences or those who have received their driving licences within the past two years are those most frequently involved in accidents, should there not be an even stronger requirement imposed on those drivers that come within those categories. Perhaps she will say something about that.
I have already referred in parenthesis to the fact that on 21 December last year I initiated a debate similar to this one about drinking and driving. I shall remind the House of what I said on that occasion. Every year 1,200 people die as a result of road traffic accidents in which drink is a contributory factor. During that debate, I asked whether something could be done to include a statement to that effect in the highway code so that at least we could be satisfied that at one point in a driver's lifetime the message would be brought home clearly in a manner in which he had to learn it before passing the driving test. I appreciate that that is not the answer, but to bring it home to somebody who is learning to drive and having to learn what drink and drive involves, as a matter of its being included in the highway code, would be a useful addition to that document.
I know that my hon. Friend the Minister keeps several copies of the code at home, because she told me so in last year's debate. She said:
My Department is reviewing the highway code, as it does from time to time and I shall see what entry in that might he useful in persuading people to do the sensible thing.
Perhaps she could give me an answer this year to the statement that she made so helpfully in replying to the debate that I initiated last year.
My hon. Friend the Minister of State said something else that I should like her to look at again. At the beginning of her reply to me last year she said:
In due course my Department is planning to give even wider information than has already been given out in the facts leaflet on drinking and driving from the road research laboratory because it needs to be much more widely available and influential.
When she replies, I hope that my hon. Friend will say what has been done about that.
I referred also in that debate to a fruit drink called "Alcaway." It purports to speed up the absorption of alcohol by the body—in simple terms, an antidote. But it cannot be said strongly enough that there is no such thing as an antidote. I pointed out that on 19 November 1984 my hon. Friend, in answer to an inquiry from me, had said:
'The rate at which alcohol is absorbed into the blood stream is affected by a variety of factors. While some products can slow down this process, I am not aware of any evidence which suggests that the elimination of alcohol from the body can be significantly speeded up. My general policy is to warn drivers of


the risk involved in driving after drinking under any circumstances.—[Official Report, 21 December 1984; Vol. 70, c. 713, 716 and 717.]
It is grossly irresponsible, morally indefensible and commercial exploitation of the most obscene kind, resulting in death, injury and misery, to market any such substance. Those who do so should remember that the Christmas present that they will give to families is the death of a father, the mutilation of a mother and the bereavement of loved ones. It was therefore very distressing to me to learn, when listening a few days ago to that excellent radio programme "You and Yours", of a new substance called "Stay Low". It is the usual kind of unpleasant tasting, high calorific fruit drink that contains a large amount of glucose syrup.
I learnt yesterday that 500 dozen bottles have been produced by a company in Nottingham. I spoke to a representative of that company on the telephone. I was given the name of the principal company, Stay Low Ltd., which has the manufacturing rights of this substance. I was given the name of a Mr. Hurley. Stay Low Ltd. is registered in Jersey. However, when I telephoned him I was told that he was busy. Furthermore, I was told that he would telephone me, but I received no call from him. The registered office is, I believe, a solicitors' office. It is merely an address for the registration of that company.
The trail of that company is interesting. Yesterday I tried to track down what this product purports to achieve. I understand that the first reference to it appeared in The Morning Advertiser on 18 December. The claim on behalf of this substance was that
anyone who drinks 10 whiskies can pass the breathalyser test after drinking two 85p bottles of 'Stay Low.,
That claim cannot be attributed to anybody and it may be inaccurate, but it appeared in The Morning Advertiser.
The office is registered in Jersey and is just a holding office, but I was able to contact a company called Crane Barnden that had been engaged by Stay Low Ltd. to produce promotional material. It is a firm of printers. I do not want any opprobrium that might attach to this product in general to attach to this company. It was very helpful to me over the telephone and explained what had been done.
Crane Barnden had received instructions to produce promotional material, but it had been unable to secure detailed information about certain aspects of the product. The firm was told that it was not entitled to disclose the name of the client. It received its original instructions from an individual rather than from a company. The result was that the firm felt obliged to do no more than produce the initial amount of promotional material. That was interesting because the firm clearly believed that insufficient information was available for it to carry on doing any more work for that client.
The firm produced only information. The bottling and mixing was done by a Nottingham company which confirmed to me over the telephone the constituent elements of the drink. It is lime-flavoured with large amounts of glucose and fructose syrups. The initial run was 500 dozen bottles which were marketed by a company called Innserve, a wholesaler to public houses in the south Devon area. The bottlers have no instructions to bottle any more.
I hope that the Minister will use her Department's resources to look into the product if it is anything like

Alcaway. It is extremely dangerous for such a product to be marketed if it purports even indirectly to enable people to drink and drive. That is a cruel deception.
I make it clear now, as I did a year ago in respect of the other product which fortunately we stopped in its tracks, first, that no tests substantiate any claims for the new product. Secondly, increasing the rate at which alcohol is broken down by the body can cause poor judgment. Thirdly, fructose can cause painful side effects.
I do not propose to go into the details of those side effects, but I have a sheet of papers containing medical opinions from learned journals which describe the inadequacy of fructose in speeding up the dissipation of alcohol in the blood, the side effects and the danger of the intake of fructose in such large quantities. Such a product might require a licence under the Medicines Act if it were designed to interfere with the normal operation of a physiological function.
I understand that the label on the product states "Don't drink and drive." That is a small concession to it being marketed just before Christmas with the name "Stay Low". Why is it being marketed now? It has all the hallmarks of a cynical, unprincipled exploitation of people's fond but foolish desire to find a magic potion which will enable them to drink and drive. There is no such potion, nor can there be. I urge my hon. Friend the Minister to investigate the product fully.
If this debate has publicised the criminal negligence of drinking and driving; if it has brought home to people that the only safe way to drive is not to drink, or if one is drinking not to drive, however short the distance: if it has the effect of saving lives this Christmas, children will still have fathers and mothers and parents will still have children at the end of the festive season and we can say to the people whom we have the privilege to represent—as I say to you, Mr. Deputy Speaker, to my hon. Friend the Minister and my colleagues have a very happy Christmas, and a safe one, and we shall all meet again in the new year.

The Minister of State, Department of Transport (Mrs. Lynda Chalker): I thank my hon. Friend the Member for Ynys Môn (Mr. Best) for reopening this issue just a week or so after we launched the 1985 campaign. I have done everything I know to get home to people the message that there is no safe way to be on the roads except never to drink and drive.
I thank the police, particularly this year, for their co-operation throughout the planning of the campaign, for it will be through their enforcement that we shall remain safe on the roads. Their intention is that we shall have a safe and happy Christmas. Their intention is not to go after every motorist, as some newspapers might have us believe; I shall return to that point later.
To indulge in the sort of statistical analysis with which my hon. Friend began his remarks might be considered at this hour rather grave, although I shall join him in giving a few figures. Within the whole context of the matters that my hon. Friend has raised are many issues that we must put clearly and squarely before the motoring public and pedestrians, for a large number of accidents at party time—not just at Christmas—involve drunken pedestrians. We are dealing not only with drivers, although they have a lethal machine in their hands.
Drinking and driving is at the front of our minds just now, but please let us not forget that this problem is not confined to Christmas and the new year. It is true that alcohol consumption is at its peak at this time, but the stark truth is that the threat posed by the drinking driver exists on the roads every day of every year, and we must ensure that all our policies take account of that.
I detect a growing indignation, in Britain and elsewhere, by people who are against the irresponsibility and culpable negligence of the few, those drinking drivers. Many people are so concerned that this is a topic of conversation not just at Christmas time but generally. I am frequently asked, "What more can we do to make people behave responsibly with respect to drinking and driving?" Normally sensible people seem to adopt a thoughtless mode of behaviour, and they then easily slip into aggressive and selfish habits. Indeed, once the drinking has begun, that whole process seems to accelerate.
That is what we must stop. I have detected—I have seen it with my own eyes in country pubs and elsewhere—that many more people are seeing the sense of the campaigns. They enjoy their drinking and they enjoy their driving, but they enjoy them by keeping them well apart and by never mixing them.
As we continue to see more than 1,000 people killed each year in road accidents as a direct result of drinking and driving, we realise that we have a long way to go before we have got the message through to a wider number of people. I assure the House that there will be no letting up in the Government's attempts to tackle what is regrettably still our most serious single road safety problem. There are others, but this, like many accidents, is avoidable.
My hon. Friend was right to say that the number of convictions had risen, but he may not have read the small print, as it were, on one statistical matter. In the last year for which we have figures, 1984, about 93,000 people were convicted of drunk driving, out of a total of 101,000 involved in drug and drink-related driving offences.
The increases in convictions are the result of the new law which came into force on 6 May 1983. With the intoximeter now being used at all times throughout Britain I have no doubt that this year we shall have a larger number of convictions than last year. I have no doubt of that because everyone is determined to try to stop this awful savage fatality level on our roads.

Mr. Best: I am grateful to hear that, because it will put the figures in context. When I referred to last year's "stay low" campaign, I said that it had been a disaster. I said that because of the statistics of problems that had arisen. Perhaps my hon. Friend will confirm that the number killed last year was up by 8 per cent. compared with 1983; the failure rate of breath tests increased from 24 to 30 per cent., an increase of 25 per cent.; the failure rate among 16 to 19-year-olds increased by 23 per cent.; and 50 per cent. of all fatalities are in the 20 to 24 age group; casualties in accidents where at least one driver failed the breath test increased by 27 per cent. and casualties during drinking and driving hours—10 pm to 4 am—increased by 22 per cent. The number killed in that period is up by 13 per cent. even though the police conducted 21 per cent. fewer tests than the previous year due to the problems of the miners' strike.

Mrs. Chalker: The whole problem is whether people will police themselves responsibly, as well as the enforcement by the police.
My hon. Friend has given a number of statistics. I shall not counter with others, but if he looks in "Road accidents Great Britain 1984" he will find the latest statistics.
Rather than bemusing the House with statistics at this time of the morning, we should remember that the number of road users killed in accidents where alcohol was a factor in 1984 was equivalent to over three jumbo planeloads of people. If three jumbo planeloads of people had been killed in the air, there would have been a public outcry, yet the public seem ready to stand back when so many people are killed, avoidably, on the roads. That is the point that we have to get home to people who may not like statistics as much as my hon. Friend.
The other thing that hits home particularly hard when one looks at what happened last year and other years—is that, of the 1,400 road users killed in those road accidents where alcohol was a factor, over 350 were innocent victims of drinking and driving. In other words, they were killed in an accident where one driver at least failed a breath test.
One road death in four last year occurred in accidents where one person had breath alcohol over the legal limit. The driver's impairment by alcohol is a major factor in about one tenth of all injury accidents. We know that it is related to the time of day and drinking. There is no question of that. We also know that the risk goes up the more alcohol is drunk. But, as my hon. Friend said, the point still remains that to have any impairment by alcohol of one's ability to drive means that there is a greater risk than necessary. It is at the point of 35 microgrammes of alcohol per hundred millilitres of breath that the risk of being involved in an accident increases sharply.
The point of a legal limit is to provide a guidance figure. As I said last year, and, as I have said every year in these campaigns while I have been in this job, it is perfectly true that if one's driving is impaired even with no alcohol in one's bloodstream, one is perfectly properly stopped by the police if they think that one's driving is so impaired. Therefore, it does not matter so much what the level is, except with those who drink so much to excess and are then so culpably negligent as to get behind the wheel of a vehicle or on to a motorbike or even a bicycle and who may cause the most terrible disasters perhaps to their own family, friends or workmates—and maiming and fatality are processes that can never be reversed.
With regard to high risk offenders, I know that the procedures that I introduced a couple of years ago to identify motorists with a possible drink problem are not thought sufficient in some quarters. I certainly believe that the concept of screening high risk offenders first—educating them and making them have medical treatment—is the right way to begin, but it is not a total solution. As we said in our response to the road safety report produced by the Select Committee on Transport, there may well be changes in the future. We shall at an early stage examine the threshold blood alcohol level and we shall then consider the case for extending the scheme to take in a wider category of offender. I think that that will go some way to meet the continuing concern about the very high risk levels and those just below.
My hon. Friend has referred to the campaign at Christmas last year. A full assessment of what happened over the Christmas period 1984 appears in "Road


Accidents Great Britain 1984." In brief, that assessment shows, that, compared with 1983, there was an increase in the number of drivers failing the roadside breath test and an increase in casualties during so-called drinking hours. I agree that the figures are disappointing but that was not simply because of the "stay low" message. As my hon. Friend knows, with as many thousand policemen on picket line duties as there were throughout the whole Christmas period last year, the campaign could not possibly have been enforced.
I am sure that the whole House will agree that nothing influences the public so much as the possibility of a flashing blue light. As those who have studied the campaign material this year will know, one poster has the heading "A sobering thought", a photograph of a police vehicle appearing in the rear driving mirror and a slogan at the bottom:
Think you can drink and drive—think again.
Some people will always say that the campaign is no good, that it should have been stronger or weaker. We had a great deal of publicity about last year's campaign, probably even more because of the controversial slogan, but I wish now to concentrate on this year's campaign.

Mr. Best: The Government promised to take account of the evaluation of the "stay low" campaign before planning this year's campaign, but I understand that the evaluation was published after plans for this year's campaign were well under way.

Mrs. Chalker: There is a problem in getting the statistics through fast enough and linking hospital statistics, conviction statistics and all the rest. Statistics covering the previous Christmas period cannot be published before November, but the knowledge that we were beginning to gather statistics, although it was not complete, was made available to the chiefs of police and myself when we started to plan this year's campaign. It would, however, have been wrong to publish that information, because, as my hon. Friend knows, interim results can be very much affected by later results, as some of the results this year have shown. There is no question of our not releasing figures for last year's campaign. The information that we need comes from a wide variety of sources and we must do the job properly. The final casualty data often come in as late as October.
There is absolutely no doubt that this year's drinking and driving publicity has had more planning than ever before. It has enabled me to do something that I have wanted to do since taking up my job more than three and a half years ago—to plan it in close consultation with the police. Unless we can enforce the campaign, I do not believe that we shall get people to police their own drinking and driving, and that is what we are after.
The police have every intention of enforcing the law firmly throughout the year. The campaign reminds drivers of the serious penalties they face on conviction, including automatic disqualification for at least a year, a fine of up to £2,000 and even the possibility of a prison sentence.
After only 10 days of the campaign, my initial impression is that the message is coming over well, helped by the strong support from local police campaigns and other local campaigns. It is much more the sort of campaign that I am happy to run to try to prevent people from injuring themselves and others.
I was asked why we did not consult users, local road safety officers and Alcohol Concern. I am well known for consulting as widely as time and opportunities allow, but publicity campaigns have to be kept private until the very last moment. My hon. Friend may recall—I am sure that the hon. Member for West Bromwich, West (Mr. Snape) does—that in the road safety debate on 15 November, I declined to be drawn on this year's drink-driving campaign because I wanted the slogan "Think you can drink and drive—think again" to have the full force of the launch on 9 December.
If one consulted very widely, that impact would not be achieved, and it is necessary to have it to get off to a good start. But we listen carefully to all the outside views that are put to us, and we are well aware of the views of bodies such as Alcohol Concern and Mr. Don Steele.
The position with the police is different, and I know that my hon. Friend will understand. We have sought to take the views of local authorities informally, without revealing the publicity campaign during the planning period.
My hon. Friend's comments about the cost of drinking and driving and the cost of this campaign were relevant. The cost to the community is about £150 million, whereas the cost of this campaign is £1·4 million. Nevertheless, this campaign will roll on throughout the year and it will be reinforced during the light evenings in 1986, because we know from experience that there will then be an upsurge in the number of those convicted for drinking and driving.
My hon. Friend said that there must be stiff deterrents. I have already referred to the penalties available to magistrates. Magistrates make up their own minds, and it is not for me to tell them what to do, but I hope that they will not hesitate to hand out severe penalties where they are warranted. That applies to all periods of the year, not just to Christmas and the new year.
We shall look at the suggestion in the road traffic law review that driving licences should be confiscated immediately, but the effect would be to penalise a driver before trial—in other words, before any finding of guilt. I accept that the result of the breath test would be positive, but under present law that would be a real departure from the general principle of the presumption of innocence until proven otherwise.

Mr. Best: I certainly do not wish to see that.

Mrs. Chalker: I am glad that my hon. Friend does not wish to see that, although that has been suggested as a stiffer penalty.
Of all the efforts that we are making with this year's campaign, I believe that it will be the physical presence of police cars—and the help that is being given from a large number of quarters such as the Brewers Society and many publicans themselves—that will make people more and more aware of what is happening, and why it is crazy to drink and drive. We have to keep the two activities apart.
The latter part of my hon. Friend's speech was about the sale of products that are said—I say that positively—to clear away alcohol from or reduce alcohol in the bloodstream.

Mr. Peter Snape: Would the hon. Lady like to comment on the current Daily Express campaign, which seems to be waged largely against her


personally, that this year the police are not enforcing the law but making it as they go along by insisting on random breath tests in various parts of the country? Secondly, would not a sensible alternative to drinking and driving be better public transport? Are not some of her Department's policies leading to worse public transport, particularly in the running of late night buses and trains?

Mrs. Chalker: I shall be dealing, at the end of my speech, with the campaigns that are being run by some newspapers.
Many efforts are being made, particularly on special nights during the Christmas period, by public transport authorities to run good public transport. But the message must still be within people's own minds that they cannot drink and drive and that they must think about what they are doing. If people think that they are going to have a few drinks, they should also think beforehand about how they will get home. If local authorities put on public transport, or private companies do so in the future, nobody will be more delighted than I.
There is a need for moderation in all things, and it is the responsibility of the individual, if he has to get home under his own steam, to ensure that he is capable of doing so. One can also be summoned for being a drunken pedestrian; one does not have to be in charge of a motor vehicle. The point about public transport is not lost on me. I am well aware of what the hon. Gentleman says. The campaign is intended to get people to think about their driving and their drinking separately. In that way there may be fewer people who are unable to get themselves home.
My hon. Friend spoke of the fructose-based drink which claims to reduce blood alcohol levels. While the rate at which alcohol is absorbed into the bloodstream is affected by many factors—the type of drink, the rate at which it is consumed, whether the person has eaten before drinking, the person's weight, and so on—there is no evidence, as far as I am aware, that its elimination from the bloodstream can be artificially speeded up by any means whatever. I am grateful to my hon. Friend for the research that he has done into this misnamed product and the claims that it is making. I shall be grateful if he will make available to my office any papers that he has.
As I said in the debate on 21 December last year, we need to look with some care at any products which could mislead the public into thinking that they could get protection by using them. I fear that this may not be the end of the story. Alkaway, thank goodness, went away last year. Perhaps Staylow will go very dead very quickly. It is a cruel deception, as my hon. Friend rightly said. I hope that anybody who sees the product will tell us where it is being marketed, because it would be helpful to see the extent of it. If production is limited to 500 dozen bottles, I hope that they will go down the drain quickly, because that is all they are worth.

Mr. Best: It tastes very nasty.

Mrs. Chalker: If it does, a drunken driver probably would not drink it anyway. We shall do all we can in my Department through all our links and the information of my hon. Friend the Member for Ynys Môn will help us.
I said that we would again consider the Highway Code, and we are doing so. This is a long and complicated job. It is even more important to get better education at an early age on drinking and driving. We shall use the Transport

and Road Research Laboratory's information to produce a factual leaflet. In the next phase of the drinking and driving campaign, we shall put greater emphasis on understanding the facts. That has been needed for some time. I hope that that helps my hon. Friend the Member for Ynys Môn in his campaign to make people wiser.
As I said at the launch of the campaign and subsequently, there has been no change in the law on random breath testing. The police have a duty, if they see a defect, to stop the vehicle. If a policeman notes that the driver smells of alcohol and acts strangely, he is within his rights to ask the driver to take a breathalyser test. I speak for the chief constable of Sussex, the chairman of the traffic committee of the Association of Chief Police Officers, when I say that there is no random breath testing and that no chief constable has authorised it.

Mr. Snape: It is not for the police to authorise it.

Mrs. Chalker: I know that, and my point is that no one has authorised it.
The police campaign seeks to keep drivers safe on the road. If the police see a faulty mechanism on a car, they will often warn the driver to put it right. If, in so warning, the police come across a person who should not be at the wheel of the car, for obvious reasons, they must carry out the law as agreed by the House. That is what the police will be doing this Christmas and during the campaign on into the new year.

Mr. Snape: Why is there an enormous discrepancy between the number of motorists breathalysed in a certain police area and the number of motorists breathalysed in an adjacent police area? The hon. Lady has made the point, which we all accept, that chief constables are not authorised to institute random breath testing in their area. She should say something about the Daily Express campaign, which is attempting to produce evidence that random breath testing is occurring, in certain parts of the country.

Mrs. Chalker: I have known many newspapers attempt to produce all sorts of campaigns.

Mr. Snape: They are all in favour of the Tory party.

Mrs. Chalker: This is not a matter of party politics, as the hon. Gentleman well knows.
Last year, police officers could not, because they had to police picket lines, enforce the law as they wished, so the fact that they are now enforcing the law properly has come as a surprise to people in certain parts of the country. I have no evidence that there is any variation between areas. I shall ask the chief constables about this.
At present, it is far better to have a campaign that is strictly enforced and warns people, and therefore may prevent loss of life in the future, than to go about this matter in the way in which some Opposition Members have. The Opposition seem to be divided in their opinion. We have asked for a tough campaign, and we have one, but it will be useful only if it is properly enforced. It can be properly enforced only if police officers are present to carry out the law. They are doing that, but that is not random breath testing. I shall take up the matter, but I can say no more than that.
The campaign spells out that a driver can be safe on the roads only if he or she does not drink and drive. As the campaign states, alongside a photograph of a driving licence and a glass of beer,
You can't hold on to both.


That may seem a truism to some, but it is a sobering thought that we may lose many people this Christmas, and that if the drivers concerned had had more care for other road users they could have saved lives and injuries. I ask the House and everyone concerned to take home the message to everyone they meet that, if they have driven a car and they find that they cannot drive, or should not be driving, they should leave the car and collect it the next day, or arrange for someone else to drive. If someone thinks that he can drink and drive, he should think again.

Copyright Infringement

Mr. Jeremy Hanley: I welcome the presence of my hon. Friend the Minister for Information Technology. I apologise for causing him to rise from his slumbers at such an hour, but I know that his concern about the subject of the debate is such that he will not begrudge the hour. The title of the debate is "Copyright infringement", which is a rather bland title for what is often regarded as an unexciting subject. There are many who have thought that a little piracy and a little copyright infringement does no harm. It has been thought that a little stealing from those who already have enough, who already earn enough and who are employed is all right. It is considered that they are greedy if they want to stop any form of copyright infringement and that they can afford to bear it. That is the sort of attitude that so often pervades our society.
Recent events have changed all that. The public are now well aware of the depths to which the pirates can sink. With the recent cases of piracy involving the Live Aid concert, the title of the debate would perhaps be more appropriate if it were "Stealing from the Starving".
The piracy of intellectual property is a world-wide industry. It has been estimated that between £800 million and £1,000 million worth of sales of audiotape worldwide are affected. It is probable that sales of videotapes and films to the value of £2 billion are affected. Books are pirated to the tune of £300 million worldwide on the best current estimate, and there is also piracy worldwide of computer software, textiles and other designs, motor parts, industrial and commercial products, and even of brand-name pills and medicines which are pirated and manufactured out of salts and sugars. The pirated pills and medicines do no good but at worst they can cause death because of their substitution.
I am sure that many hon. Members will have read and discussed the recent cynical attempt to cash in on the suffering of the starving millions in Africa by the Indonesian pirates, who have produced bootlegged tapes of the Live Aid concert which took place in July.
The British people have a good record of providing bilateral and multilateral aid, both through Governments and through private individuals giving generously. No doubt the House will remember that the Live Aid concert galvanised the world. It produced an international inspiration to give, and an international recognition of the fact that so many people, through no fault of their own, were starving and in need of help. We recall that 140 artistes gave of their services for no fee and performed live. Mr. Bob Geldof, in his unique and abrasive manner, cut through the niceties and red tape, put the show on the road and tapped the hearts and consciences of millions.
Perhaps I should explain the difference between bootlegged and pirated tapes. A pirated tape is when the manufacturer takes an existing tape, copies it, sells it—thus breaking copyright—and keeps the proceeds. A bootleg tape is when a manufacturer records something that does not exist on tape—perhaps a concert on television, or even a live concert. He manufactures and then sells the tape.
There are no original tapes of the Live Aid concert. There has never been a genuine, original tape of that concert. Many people may have recorded it in their homes,


many people may even have recorded it on video machines, but there is not a single commercial tape that is legitimate. People may question why it was not recorded, and feel that an opportunity may have been lost. They may ask whether Mr. Geldof is causing piracy by creating an unfulfilled demand. The truth is that 140 artistes have 140 lawyers, and to get 140 lawyers to sanction recorded music for sale is a devil of a job. Mr. Geldof gave guarantees that there would be no tapes until such time as the lawyers reached agreement.
After all, the concert was live and some of the performances were fairly instant and unrehearsed. Some of the artistes might not have wanted their contribution on a live platform preserved for posterity and sold on tape. Many of the performances were quite brilliant and inspired, yet they were not in any way performances designed to be recorded and sold to the world. They were an attempt to encourage people to give of their generosity as the artistes were giving of theirs.
The tapes that are being pirated throughout the world are labelled, "Original". The bootleg tapes of the Live Aid concert even state on them, "For African famine relief' in an attempt to convince consumers that they are not only buying good music, but are contributing to a worthy cause. Not a penny of the proceeds of those tapes that are selling in vast quantities throughtout the far and middle east, even in Italy—and, who knows, even here—reaches the Band Aid Trust. The proceeds are pocketed by the pirates as private gain.
The International Federation of Phonogram and Videogram Producers has estimated that more than 1·5 million cassettes have now been sold. The figure might even be nearer 2 million. According to Kevin Jenden of the Band Aid Trust, those proceeds would be enough to feed 2 million people for a month. Who has benefited? It is a few Indonesian millionaires.
The Live Aid recordings are currently on sale all over the middle east, especially in Saudi Arabia. As I said, they have even reached Italy. Boxed set LPs have been uncovered in italy, but they were also made in Indonesia. Those buying the cassettes are being led to believe that their money is going towards helping the starving in Africa, whereas in reality it is going into the pockets of the unscrupulous. At least four bootleg editions of the Live aid concert are on the market in the middle east, all manufactured in Indonesia. Some of the cassettes bear Indonesian Government sales tax stickers, which give a unique production number to each recording. The boxed sets of LPs found in Italy also carry those tax stickers.
In Saudi Arabia there are reports that at least 1 million copies of the Live Aid cassettes have been sold directly to that country because of demand. There was a story yesterday of a new tape cassette factory being opened in Indonesia with a production line capability of 6 million cassettes a month. The tax stickers that appear on the Indonesian cassettes show that the Indonesian Government have taken 15 US cents every time one is sold or exported. That means that the Indonesian Government have collected US $300,000 in money which should have gone to Live Aid. That is just a fraction of the money that has been made by the manufacturers of those bootleg tapes. On the other hand, the starving in Africa have received nothing from this industry.
Legal action can be taken in some countries. In Italy the industry is now carrying out nationwide raids on retailers of those bootleg tapes. To date 10,000 bootleg LPs

manufactured in Indonesia have been seized in Italy. Meanwhile, in Indonesia, virtually nothing happens. The copyright law protects only local recordings, and an estimated 30 million pirated cassettes are exported every year. The Indonesian Government claim that all exports of cassettes to Saudi Arabia are, according to a letter that I have, either recitals of the holy Koran or Indonesian Arabic music recordings. However, the facts speak for themselves. How can the Indonesian Government claim that the exports are only of the holy Koran w hen the stickers show that they know very well what they are collecting tax upon? The Live Aid bootleg is not a recital of holy works; it is a deliberate rip-off.
The message of international anger at the Live Aid piracy is beginning to embarrass the Indonesians. Mr. Mochtar Kusamaatmandja, the Indonesian Foreign Minister, has announced that he has asked the Justice Ministry to take action against the pirates. That may sound fine, but the problem is how. In response to previous complaints by the record industry, the Indonesians have always replied that piracy is not illegal under Indonesian law as no foreign records are covered by Indonesian copyright, as I explained. Only yesterday it was announced in Indonesia that the bootleggers were donating £22,000 out of the kindness of their hearts to Lye Aid. That was meant to be compensatiom for the millions of profit that they have made. I do not believe that that is a generous gesture at this Christmas time. It is a penny in a bucket, and one of the most cynical Christmas presents that I have ever heard of.
Live Aid is only one example, albeit perhaps the most despicable of late, of a much wider problem. The American charity record "We are the world" has been widely pirated, and many others, too. In fact, any successful record, whether for charity or not, is likely to be copied by the Indonesians and others within weeks of release.
That is costing the legitimate industry over US $1 billion per year in lost sales. The British music industry alone is losing almost £100 million per year from only six countries—there is more from others. Those countries are Indonesia, Singapore, Taiwan, Korea, Nigeria and Malaysia. In Singapore, tape piracy accounts for 85 per cent. of the market. An estimated 10 million pirate cassettes will be sold on the local market and 50 million produced for export in 1985. However, I must give credit to Singapore. Although it has the worst record for copyright infringement of any country in the world, the Government have, as a result of pressure from the USA, announced their intention to enact a new copyright law before July next year. The level of piracy in Singapore is already declining, and if the legislation is enacted it should be down to under 10 per cent. by the end of next year. It is important that the pressure exerted upon Singapore by the USA should be maintained by foreign Governments until that happens.
In Taiwan, tape piracy accounts for 55 per cent. of the market. In Korea, it accounts for 10 per cent. of LPs and 90 per cent. of cassettes. In Malaysia, 85 per cent. of all cassette sales are pirated. There is very little piracy of LPs in Malaysia. In Nigeria, piracy accounts for 27·5 per cent. of LP sales and 83 per cent. of cassette sales. In Saudi Arabia there is little piracy of LPs but 95 per cent. of all cassettes sold are pirated. The only legitimate product available tends to be educational material. It is estimated that in Saudi Arabia 50 million pre-recorded pirate


cassettes will be sold in 1985. In addition, an estimated 100 million blank tapes will be sold, 40 per cent. of which will be used by shops for in-store pirate taping. In Indonesia, virtually 100 per cent. of recordings of international repertoires sold are pirated. The lost sales to the United Kingdom music industry are estimated to be as follows: Singapore more than £51 million; Taiwan £1·5 million; Korea £1·5 million; Malaysia £9·3 million; Nigeria £8·8 million; and Indonesia £14·8 million.
In Indonesia alone, record pirates are costing British companies some 15 million unit sales a year. It is time that the Government made a strong call for justice. The copyright law in Indonesia covers only local works. No protection is given to foreign works, whether they be books, sound recordings or films. Throughout Indonesia, foreign sound recordings are pirated extensively and about 30 million international recordings, as well as an Arab repertoire, are exported to Saudi Arabia. The matter has been raised with the Indonesian Government, and the International Intellectual Property Alliance, representing all of the major copyright interests in the United States, recently submitted a report to the United States trade representative on piracy including Indonesia. The report is a staggering indictment of the pirates and a staggering record of the extent of the piracy worldwide.
Like any other, the record business deserves a return on its investment. Only one record in 10 becomes successful and the profits from that 10 per cent. are needed to fund development and rising artistes and to pay for less profitable but culturally valuable recordings such as jazz and classical music. It is not generally known, though it is obvious with a little thought, that there is no other industry in Britain in which young people, perhaps with little education or hope of great success, can succeed in a manner which is beyond most people's dreams. No other industry enables groups of young people to succeed financially and to rise to popular acclaim so quickly, knowing that their talents will be used for many years to come. The investment in new groups and new recording artistes is one of the most valuable contributions of the record business. It is the marginal profits which help to create extra investment. If the record industry gets the correct return for its services, more groups and more young people will be given a start to see whether the public approve of their musical tastes.
The pirates put nothing into the industry. They discover no talents and take no risks. They copy only the top 10 per cent. and siphon off the money needed to invest in the future. Without that money, fewer artistes are recorded, fewer classical records appear and our culture is weakened. We have institutionalised piracy in the United Kingdom. How many people can honestly say that they do not record records or programmes from the radio or television? It is regrettable that the Government are no longer considering a royalty on blank cassette tapes. I believe that the public would prefer their taping of records and programmes to be legitimised. If, in exchange for that, a royalty of 10p or 20p per blank tape were paid, I am sure that everyone would understand the benefits which would flow from a better funded record business. I am told that that is not to be, and I have registered my regret.
Records are not alone in being attacked. The copiers attack any successful industry—the book trade, software

houses and film producers. Counterfeiting strikes at well-known British trade marks, and often with dangerous results. We have all heard of the fake Ferodo brake linings sold in Africa which take six times as long to stop a vehicle as genuine linings and the useless drugs that are sold under well-known names. Fakers are costing the industry millions of pounds and thousands of jobs. When will it end?
The Live Aid piracy puts not only the Government but all of us under a moral obligation to take a firm stand. British works are not protected in Indonesia, yet the Indonesians get the sixth highest amount of British foreign aid in the world. In 1984 we gave them £28 million in trade loans and aid. Is it not time that we imposed a few more conditions when we are so generous? I am not asking that we take money from the starving, or that we withdraw genuine money aid which will be used for those less fortunate than ourselves, but if we are lending money for industrial purposes and bilateral trade arrangements, the conditions should be much stronger.
The old cautious arguments that we must do nothing to upset existing trade are not good enough. The Americans do not think so. Section 301 of their Trade Act allows them to impose sanctions in countries that do not protect United States copyrights, trade marks and patents. Moreover, they have shown that they are prepared to use it. There is even a danger that countries such as Indonesia will seek bilateral deals with the United States to protect only American products. That will allow the pirates to turn their full attention to copying the goods of more cautious countries that will not act to protect themselves.
We know what can be achieved by a strong line. Secretary of State Shultz, during a recent visit to Singapore, laid down the law. When the public in Singapore discovered that they had not bought genuine Live Aid cassettes and that the money had not gone to the starving in Africa, they were livid. The Singapore Government asked the public to seek out the bootleggers. They were discovered within a few days, and are now serving 10 to 15 years imprisonment for what I regard as theft.
Exactly five years ago there was an Adjournment debate about counterfeiting of United Kingdom trade marks in Taiwan, especially in the textile and motor industries. The then Minister for Trade, my right hon. Friend the Minister for Hertsmere (Mr. Parkinson), made a robust reply. He said:
The hon. Member said that the way forward is for us to ban the import of products from Taiwan. I must tell the Taiwanese authorities that our patience is wearing extremely thin. We are considering the evidence at our disposal. They have the opportunity to avoid a major incident by taking the strong action that Hong Kong has taken. Unless they do, the Taiwanese authorities must be prepared to accept the consequences".—
[Official Report, 19 December 1980; Vol. 996, c. 730.] The result was not a trade war, as some timorous souls forecasted, but strong new Taiwanese legislation within months. It can have been no accident that a delegation from the European motor industry shortly afterwards saw that the Taiwanese Trade Minister had a copy of the relevant Hansard on his desk.
In reply to a question from my hon. Friend the Member for York (Mr. Gregory), the Government have said that they will make representations to the Indonesian Government about Live Aid piracy. That is a start, but it is not enough. The Government should make it abundantly clear to the Indonesian Government that piracy of any


British work will no longer be tolerated, and that unless reciprocal copyright protection is granted to United Kingdom works they must face the consequences.
In a letter of 30 November to the Confederation of Information Communication Industries, my hon. Friend the Minister said that we must have proof of the illegal act. I have proof, which he can see later today—bootlegged cassettes with Indonesian sales tax stamps and individual numbers on them. That is the extent to which the pirates will go.
The anti-counterfeiting unit of the Department of Trade and Industry was doing valuable work which I should like to continue. I am pleased to announce that the copyright industries—the Publishers Association, the record industry, and video and software producers—are now coming together in a new coalition to present to the Government evidence of the damage caused to British companies, and to spell out the case for protection. At this time of Christmas, I call on the Government to heed their call.

The Minister for Information Technology (Mr. Geoffrey Pattie): My hon. Friend the Member for Richmond and Barnes (Mr. Hanley) has done the House a service in raising this important matter at a very important time. I make it clear to him and to the House that the increasing problem of copyright pirating and bootlegging in export markets is taken seriously by the Government. Recently, I had the opportunity to make our attitude clear when my hon. Friend the Member for Christchurch (Mr. Adley) brought Lord Macmillan and members of the Publishers Association to discuss problems with the printed word. We had a constructive meeting.
I am grateful to my hon. Friend for defining, for the benefit of the House and of the Official Report, exactly what bootlegging is in this context. It means that I need not do so again.
The House will recall that the problem of video and audio piracy within the United Kingdom has been largely brought under control by the Copyright Act 1956 (Amendment) Act 1982 and the Copyright (Amendment) Act 1983, and we hope that the Copyright (Computer Software) Amendment Act 1985 will do the same for the emerging problem of computer software piracy. But those measures are of little help to British exporters of books, videos, sound recordings and software, who must rely on the copyright laws of the importing country to fight any piracy of their material occurring locally.

Mr. Bryan Gould: Before the Minister leaves the domestic scene and moves to the main theme of the speech of the hon. Member for Richmond and Barnes (Mr. Hanley), will he comment on the hon. Gentleman's remarks about the pirating of audio recordings at home and on the reports that we have both heard to the effect that the Government are having second thoughts on whether to place a levy on blank tapes? Will he comment on the accuracy of those reports, and perhaps suggest what other thoughts the Government have had on the subject?

Mr. Pattie: I was intending to do so, and will do so gladly.
Such piracy is unquestionably losing our exporters a substantial volume of business in some parts of the world.

One main area of concern is the far east, where piracy flourishes not merely for local consumption but for export—as my hon. Friend described—and where local copyright law frequently fails to protect foreign works, The middle east is also a problem area, since it is an important customer for much of the pirates' output.
Reliable estimates are difficult, if not impossible, to obtain, since pirates do not publish statistics. But the United Kingdom sound recording industry estimates that worldwide it could be losing as much as £300 million of export sales through piracy and bootlegging. The United Kingdom publishing industry puts the figure for lost book sales at about £100 million.
It is sometimes argued that unauthorised reproduction' of copyright material by developing countries is justified in the cause of education, or because the price of educational material is unreasonably high and beyond the purchasing power of Third world students. This argument fails to recognise that destroying the market for the legitimate producer itself contributes to raising his costs, but in any case a large proportion of the material pirated throughout the world—the Live Aid bootleg is a case in point—is not for the educational market at all. It is reproduction of straightforward entertainment works of one sort or another—popular music on record or cassette, feature films and popular novels. No country can reasonably defend the pirating or bootlegging of intellectual property of this sort in the name of educational advancement or anything else. It is, on any analysis, a form of theft, and the absence in some countries of legal rights protecting foreign works or performers does not make it any less so.
The Government, in common with our Community partners, take seriously the problem of copyright piracy, as we do the allied problem of counterfeiting, which overlaps it. The first essential is to encourage the adoption of comprehensive and enforceable copyright law in those countries which lack it, and improvement of the law in countries where, as is too often the case, rights are inadequate, enforcement procedures cumbersome and penalties for piracy too low to deter.
We must also encourage these countries to extend their copyright protection to the works of foreign nationals. The Government will continue to support industry's efforts to combat piracy by pressing these objectives on the Governments concerned, as we have in the past where evidence of a problem has been presented to us. I stress the need for evidence because, hard as it may be to obtain—I do not under-estimate the difficulty—one can hardly expect another Government to take seriously a charge that they are permitting or encouraging copyright piracy, if no concrete evidence is produced in support. Here we must inevitably look to the copyright industries to keep us as fully informed as possible about the nature and scale of the problem. I am grateful to my hon. Friend for the proof that he has in his hand. Let the Official Report show that that is the case.
I refer again to the recent meeting that I had with my hon. Friend the Member for Christchurch, following which I am aware that significant details of further evidence of that particular part of the counterfeiting problem were made available to my officials, and that is extremely helpful.
Secondly, the Government will continue to participate in international initiatives to combat piracy and counterfeiting. Piracy is currently a concern of the World


Intellectual Property Organisation, which administers the Berne copyright convention, of the Council of Europe, and of the European Community. The Community's Ministers of Culture adopted a resolution in July 1984 on measures to combat audio-visual piracy, and the Commission's forthcoming Green Paper on copyright is also expected to address the issue of copyright piracy.
Counterfeit goods do not necessarily infringe a copyright, but they will often do so. The Government are concerned about the growing trade in counterfeit goods and we are particularly keen to bring current work in GATT on counterfeiting to a speedy and successful conclusion. We want to see a GATT code that would give national customs authorities powers to tackle imports of counterfeits at their borders.
We hope to achieve this objective in the forthcoming GATT round, although this will not be easy. The United Kingdom, through the Community, has been trying for over 10 years to secure the agreement of developing countries to such a GATT code. At the moment, of course, "counterfeit" in this context means goods bearing an unauthorised trade mark, but even on this narrow front we have encountered strong resistance, and many developing countries argue that GATT is not competent to address the subject. Against this background, the Community is shortly to begin detailed consideration of the link between intellectual property and trade policy, in preparation for the new GATT round.
My hon. Friend the Member for Richmond and Barnes has raised a number of specific piracy issues—first and foremost, the alleged production in Indonesia of bootleg cassettes of the Live Aid concert. I say "alleged" almost from the legal point of view. I am persuaded by what my hon. Friend has told the House. I am aware of the allegations, and I am looking forward to receiving the cassettes from my hon. Friend.
Clearly, these cassettes, whatever their place of origin, must be bootleg, since, as my hon. Friend has said, no official recording of the Live Aid concert has yet been issued. The cassettes carry a legend calculated to mislead the purchaser into believing that the proceeds will go towards African famine relief, even though this is not explicitly stated. I have to share my hon. Friend's contempt for this despicable series of actions. I share his encouragement that the Indonesian Minister, Dr. Mochtar, has recently called for action to be taken against the bootleggers. My hon. Friend and the House may be interested to know that my hon. Friend's debate is particularly timely, because officials are discussing this issue and making representations on the matter to the Indonesian high commission in London today.
My hon. Friend asked what, if any, conditions should be imposed upon our relationship with Indonesia, which is across many fronts. I have considerable sympathy for the position that he has expressed. I have never believed that the Government's position on any issue is weakened by a firm statement of belief by the United Kingdom Government, or by saying that we find the present situation unsatisfactory and that we shall not tolerate its indefinite continuation.
We have noted the effect of the United States action, particularly in places such as Singapore. Although the United States can bring considerably more clout to the

international market place than we can, we must not under-estimate our position in the world market or our position over intellectual property rights. My hon. Friend knows that trade policy is not a matter for me but for my right hon. Friend the Secretary of State for Trade and Industry. However, we consult one another closely about these matters. I should not like my hon. Friend automatically to assume that we wish to adopt the feather duster approach. We do not.
My hon. Friend referred to the fact that there are alleged centres of piracy elsewhere in the Far East. We are encouraged by recent moves to improve the protection for foreign copyright owners in two places in particular which have given cause for concern—Singapore and Taiwan. Singapore has recently completed a new draft copyright law, with a view to its adoption during the next year or so. We should like to be told more precisely when that is likely to be. The United Kingdom hopes soon to be in a position to furnish comments on this draft law to the Singapore authorities.
In July of this year, Taiwan also introduced a new copyright law, which provides for the protection of foreign works on a reciprocal basis. The United Kingdom has already taken the necessary steps to meet this criterion of the new law. My hon. Friend may like to be reminded that the United Kingdom has made an Order in Council that applies the protection of the Copyright Act 1956 to such works in Taiwan, with effect from yesterday. My hon. Friend's debate is therefore timely on both those counts. Who knows?—Taiwan's position could be linked to the earlier debate to which my hon. Friend referred.
Both my hon. Friend and the hon. Member for Dagenham (Mr. Gould) referred to a blank tape levy. A White Paper on intellectual property and innovation is expected to be published early in the new year. No matter what the newspapers may say, no final decision has been taken on this issue. It would not be the first time that the newspapers, while speculating—and having every right to speculate—have not necessarily been accurate. The House will not expect me to speculate about the contents of that White Paper. I think that when my hon. Friend looks at some of his arguments on this subject he will agree with me that they were a little unfair. The Government's Green Paper that was published at the beginning of this year considered audio tapes and video tapes. With video tapes there is a significant element of time shifting, as it is known. My hon. Friend is, I know, aware that many people record off television for viewing on another occasion, either later in the evening or at the weekend.
As for audio taping, it is agreed that there is copyright infringement. However, many people put records that they have bought on to audio tapes because they wish to use them either in their motor cars or elsewhere in the house. That does not invalidate the case, but the copyright fee is often paid in the original purchase price.
The issue is difficult and complicated, and final decisions have not yet been taken. However, the issue will be discussed in the White Paper to be published in the new year.
I thank my hon. Friend very much indeed. I know that it is something of a cliché for Ministers to say that during the night through clenched teeth, but whatever the time—this time is not particularly inclement—I should have been happy to respond to comments on this extremely important subject.

Industrial Tribunals

Mr. Richard Holt: The Minister will not be surprised to hear that I have chosen to speak about industrial tribunals and to explain to the House how industrial tribunals work today compared with how they worked under the legislation which established them. I first spoke on this topic on 15 May, since when my views have been formally reinforced by recent experiences at Ebury street.
The idea of some form of industrial relations court was first mooted as long ago as 1919. Not until the passing of the Industrial Training Act 1964 to determine appeals for people assessed for levy were industrial tribunals as we know them set up. Their functions have gradually been extended by the Redundancy Payments Act 1965, the Docks and Harbours Act 1966, the Equal Pay Act 1970, and other measures. Today unfair dismissal and sex discrimination cases are no longer dealt with in the informal tribunal manner.
The idea of a tribunal is to provide a place where people can place their grievances fairly before an impartial panel. If an injury or injustice has been done, they can seek to have it put right. If the finding is in their favour a financial settlement will be made in compensation. It is right that there should be a court of last resort.
The concept of tribunals has changed. Originally the idea was that there should be an informal atmosphere unburdened by legalistic practices, prejudices and all the panoply of a court. Today, if one presents oneself at an industrial tribunal, one is in a court of law just as one would be if one was at the Old Bailey on a serious charge.
Employees should not be put in that position. Unless one is legally represented at an industrial tribunal, one's chances of success will not necessarily be measured by the merit or otherwise of the case. It will be measured by some obscure precedent of which one has no detailed knowledge, other than that which is read in the law reports and reviews.
This subject was raised a long time ago in the House by a number of distinguished former members. Mr. Charles Pannell, speaking in this Chamber in December 1970, said:
"Yet these are courts, and one of the prime objections I find to this Bill is that it will lift industrial relations into the purely legal atmosphere, where precedent will be added to precedent and very few things will be discussed on their merits."
What a far-sighted statement that was. He also said:
"I think this whole thing will be a lawyers' paradise. I came across this quotation which was used by Philip Snowden on the Trade Disputes Bill in 1927. I only use it because he quotes Winston Churchill in an earlier incantation".—[Official Report, 14 December 1970; Vol. 808, c. 1031–2.]
As we see, for a long time the lawyers have gradually been getting matters to go their way. Markers have been put down. Charles Pannell put down a marker when he used the words that I quoted. Lord Can, as he now is, also spoke in that debate in 1970. Mr. Pannell having made the comment that I quoted, Mr. Can, as he then was, apologised for not quite catching Mr. Pannell's remark. Perhaps the ball was a little too fast as it came off the face of the bat.
The idea of these courts was that they should not be terribly legalistic places. The idea was to have a friendly atmosphere, perhaps discussing matters over a cup of tea

or coffee; I would not suggest anything stronger. Let us do away with all the trappings of a court of law. That was why the House decided to call them tribunals, not courts.
My hon. Friend the Member for Warwick and Leamington (Sir D. Smith) was the Minister at the time of the debate in 1970. He said then that people would be put at their ease. He said:
As I was saying, deliberate efforts will be made to put people at their ease. Generally in civil cases the panoply of the law, even though there will not be the full criminal court procedure, can put people at a disadvantage".—[Official Report, 14 December 1970; Vol. 808, c. 1072.]
It was recognised by the Government at that time that the full panoply of the law and a legalistic framework would put people at a disadvantage, particularly if they were not used to the courts and the legal framework. In that same debate, the present Lord Wilson of Rievault said that he was interested in the word "informality" in the context of the new court, whatever it might be called.
There was concern then, and I am expressing concern, today, because the drift has gone on and on, so that now we no longer have that which was intended by Parliament in the first place. The Government must tackle this problem because in industrial relations we are drifting into waters that are familiar to us all: one can get justice in many cases so long as one can afford it, and frequently the cost is such that one is denied the opportunity for justice.
Another telling point is that because industrial tribunals are not courts of law a person's right of appeal, as might apply if the offence had been murder or rape or some trivial offence, is not there. Once a person has been found guilty in the eyes of the tribunal, he has no right of appeal unless he can prove a point of law. That is wrong.
Let me dwell a little on the composition of the tribunal. I can find no justification whatever for the chairman of a tribunal being a banister or a lawyer of a minimum of five to seven years' standing. They may never have been inside a place of commerce or industry—a shipyard, a mine or even a farm, although they may have that as a side interest. They have no depth of knowledge of the real world of industry and commerce, but they have knowledge of the law and they are there in a quasi-judicial capacity.
The other two members of the tribunal are nominated,
one from the trade union's side and one from the employer's side. Does not that bespeak the fact that there is an intrinsic interest on both sides before a case comes before the tribunal? There has to be an idea of prejudice, otherwise there would have been no need to seek a balance. Why should there be one from either side? If people are to judge a case on its merits as it is presented by the appellant and/or the employer, surely, in the same way as the jury system takes virtually anybody and allows them to become jurors, we should have well thought of honest people of integrity, but not necessarily with a track record as employers or employers' hacks or trade union nominees. The view might then be expressed that they were a little more impartial in the way in which they looked at things.
Since I last spoke on this subject it has been brought to my attention that nominees from trade unions are liable not to be resubmitted by the trade union for consideration to remain on tribunal panels if too often they do not find in favour of the appellant. That is something new which has not been widely expressed previously.
One man came to see me, who, for obvious reasons, has to have anonymity, because he was concerned at the


pressure being put upon him through the new militancy within his trade union which said that it would not support him any further as a so-called independent member of a tribunal if he kept on finding in favour of the employers. [Interruption.] I am sorry if I hear an interjection from the Opposition Front Bench that that cannot be true. I shall supply privately to that hon. Member the name and address of the man in question. I have already supplied it to my hon. Friend the Minister. Therefore, that helps to make my case that we should be re-examining tribunals and their composition—

Mr. Norman Hogg: Will the hon. Gentleman make it clear that the intervention to which he referred did not come from the Opposition Front Bench?

Mr. Holt: I am happy to do that. It came from a sedentary position on the Conservative Benches.
I am worried that the integrity of the tribunals themselves is now being called into question.

Mr. Don Dixon (Jarrow): The hon. Gentleman has referred to trade unions putting pressure on their nominees to industrial tribunals. If he took that claim to its logical conclusion, there would be no trade union nominees on the tribunals because in the vast majority of cases the tribunal finds in favour of the employer.

Mr. Holt: I accept what the hon. Gentleman says. He will see from Hansard that I said that this was something new, not something that has been going on since the courts were established in 1971. I am saying that it is a new phenomenon which emphasises my point that it is time for a full review of the tribunals their composition and their procedures.

Mr. Dixon: Just for the record, should not the hon. Gentleman refer to it as a new allegation rather than a new phenomenon?

Mr. Holt: Whether the hon. Gentleman takes it as an allegation or not, I will stick to the word "phenomenon". I do not think that bandying semantics will achieve very much. I am concerned about this because the impartiality of the tribunals is essential.
On the hon. Gentleman's point about the outcome of cases, I am approached fairly regularly and I talk to people quite a lot on this subject and I know that a vast number of cases do not come before the tribunals at all. Where compensation is paid one might reasonably assume that those cases might well have been won by the appellant if they had come to court. In those circumstances, the bare statistics do not tell the whole truth and it is hard for anyone to justify the argument one way or the other in that context.
With regard to the chairman—the lawyer or judicial person—I recently appeared at Ebury street in front of a Lady Mitchell. Everyone I speak to tells me that if a case comes before Lady Mitchell the employer's chance of winning it is nil. That seemed a very strong allegation, so I decided to investigate whether it was credible. I asked the Department to tell me how many cases had come before that lady as chairman and whether the outcome was for or against the employer, but I could not obtain the information. I then asked the industrial court, but again I could not obtain the information. There is more secrecy

and difficulty over this than over criminal proceedings in the High Court. That is highly unsatisfactory. Very learned lawyers have told me that as soon as they know the outcome of the Russian roulette system of allocating cases to court rooms they know what the outcome of the case will be.
That takes us a long way from the orginal idea of informal courts to adjudicate on individual cases of dismissal. We now have 15 centres and a large number of people, costing £20 million or more. It is time for a reappraisal of the system by the Government. Now that we have 15 years of case history, with 16,000 cases per year, we can see that the tribunals are not working out as originally intended. They are not cheap and they are not speedy. The average time for a case to come to court is 13 1/2 weeks. There is no incentive for the individual to find a job in that time because if he is then found to have been unfairly dismissed the compensation will be diminished. What we really need is a vast number of tribunals made up of the local great and good nominated and supplied from a wide variety of sources. If someone is dismissed, he can go very speedily—within 48 or 72 hours—before an informal tribunal. The test is not necessarily whether in law a person has been fairly or unfairly dismissed, but whether that is so in the eyes of the tribunal.
I know of one employer who was told, "You had another job of a lower grade which you did not offer to the appellant and therefore in law it was an unfair dismissal." On the next occasion, he offered a job in a lower grade but was told, "You cannot do that." and the case went against him. Therefore, the present structure is over-legalistic and costly.
Some employers are being forced to contemplate very high costs indeed for the legal profession in respect of cases brought by the Equal Opportunities Commission. The EOC has an unlimited fund of money from which it can pay lawyers. One furniture manufacturer will shortly face a five-day hearing as a result of the Ford decision. If the decision goes against him, he is liable to lose between £200,000 and £250,000 and could be faced with a legal fee of £20,000. That is not what industrial tribunals were intended for. That is what Mr. Charles Pannell said in 1970.
The informality does not exist by which there can be a free exchange of views. I challenge the Minister or any of his officials to go to Ebury street, to sit in on a hearing and to listen to the way in which it is conducted on a legal basis. One can present an opening statement, call witnesses, cross-examine, have re-examination and make closing submissions, but one should not necessarily look for truth or fairness. One should look for a case precedent during the last 15 years on which one can hang the case and outwit the other barrister who has not come across that loophole.
I attended a case in which there were 10 precedents. Let us imagine an employer with 25 or 30 employees. Let us suppose that he is living on the margin, and let us also suppose that the appellant turns up with a solicitor provided by one of the law societies or citizens advice bureaux who is armed with all the facts and figures and who takes cases on a regular basis. What chance does that employer have if it is purely a legal matter?
When I pressed the Government on this matter some time ago, the Minister's predecessor said that they were concerned that the tribunal courts were becoming over-judicial, over-legal, over-costly and not quick enough. But


18 months have gone by, and absolutely nothing has been done. It is almost as bad as trying to discover the boundaries of Cleveland. No one disputes that there ought to be some form of industrial tribunal at which those who feel they have been wrongly dismissed may have their cases assessed and heard. If there has been an injustice, there should be compensation; no one disputes that. But many people today—other than those with vested interests in the legal profession—would perhaps say that things have gone too far.
Can anyone seriously believe that the tribunals were intended to deal with cases such as that of the singing rabbi comedian which filled our papers, gave us all some amusement, but cost us all a lot of money? Can anyone seriously imagine that the tribunals were intended to deal with the case of a sacked football manager such as Malcolm Allison? The transcript shows how much he managed to smoke and drink in his short time at Middlesbrough football club at the expense of my constituents. Were the industrial tribunals set up for that sort of case? I accept that at the end of the debate on the Consolidated Fund a little lightheartedness comes in, without any harm, but it is a serious matter.
I urge the Minister to say that he will ask for a Select Committee of the House of Commons to be set up to examine the working of the tribunals today, as opposed to what they were intended to be, the drift into legalism, the drift into heavy cost and the drift towards the slowing down of the process of justice.
If the Government do not do something about the matter, I shall be as tenacious as any Opposition Member. I do not believe that any of the parties involved are being given a fair crack of the whip, other than the lawyers, and I do not want industrial tribunals ultimately to become the "Bleak House" of this century.

The Parliamentary Under-Secretary of State for Employment (Mr. Peter Bottomley): I am grateful to my hon. Friend the Member for Langbaurgh (Mr. Holt) for raising the subject of industrial tribunals.
With regard to excessive legalism, both the Court of Appeal and the Employment Appeal Tribunal have made statements which demonstrate that they, too, are losing patience with legalistic tendencies. In particular, the president of the Employment Appeal Tribunal has on several occasions emphasised the need for industrial tribunals to look to the words of the statute for their authority in deciding cases. He said that they should not be too quick to draw comparisons with the facts of other cases and treat them as binding precedents, even those which have come to be widely known.
When my hon. Friend talks about excessive legalism, he describes it in exactly the right way. We need some degree of legalism. What we do not need is the excessive digging back into cases, with people thinking that they are being very clever in showing that they have done more research than anyone else. The important point, as my hon. Friend rightly emphasised, is to discover what happened, was it reasonable and was it fair.
My hon. Friend said that the only grounds for appeal against the findings of an industrial tribunal were legal. That is not a bad position to be in. If one were able to appeal on other than legal grounds, it would put the tribunal into great difficulty. Both claimants and respondents would be seen to be in an impossible position,

because the tribunal exists to decide what happened and whether it was fair, reasonable and lawful. If people were able to appeal on matters other than points of law, it would tend to reopen matters and to duplicate everything that the tribunal is there to hear.
My hon. Friend mentioned a minority of my predecessors. He has shown that the half-life of a Parliamentary Under-Secretary of State for Employment is not long. There may be times in the future when others will be able to refer to my hon. Friend in my position. I do not think that his approach as a Minister would be different from mine.
My hon. Friend invited me to go to Ebury Bridge road. I have been there twice, once as Minister, to observe and the other time when I was an employer who had been involved in the sad issue of redundancy and three of the people involved made a claim for unfair dismissal. I went along without legal representation..i did not consult a lawyer before I went. The work people were represented by their union representative. We managed to get three cases through in four hours, to the satisfaction of both sides. I do not think that it is relevant to say which way the case went, but the firm incurred no extra cost.
Before a case comes up for consideration by a tribunal—this applies not only to my case, but to all cases—there are opportunities for ACAS to work for individual conciliation. It is worth remembering that a minority of dismissal cases lead to claims for unfair dismissal. Of those cases that come forward, about a third are withdrawn, about a third are conciliated and about a third go before a tribunal. The claimant is successful in about a third of the cases that go before a tribunal. Taking the whole procedure together—the opportunity to withdraw, the opportunity to conciliate and the tribunal hearing—and even looking on the tribunals as legal instruments, I believe that the tribunals consider only a minority of a minority of cases. Looked at in the round, there are opportunities for people to come to an agreement on facts and to avoid putting their future and fate in the hands of three people.
My hon. Friend asked whether it should be necessary for the chairman of a tribunal to be legally qualified. I have not torn that proposal up by the roots to examine it. I doubt whether we can change the requirement. There is a split responsibility. The Department of Employment is responsible for administration and for proposing laws to Parliament, and appointments of chairmen are in the hands of the Lord Chancellor's Department. My hon. Friend will need to be persistent, as he has promised, in trying to get the two Departments to look at this matter together.
My hon. Friend asked whether I would refer the whole issue of industrial tribunal procedure and presumably, that procedure's part in industrial relations, to a Select Committee. It is not in Minister's hands to do that. No doubt, Select Committee members will read my hon. Friend's words.
My hon. Friend referred to excessive legalism, excessive cost and excessive time. I hope that my response will not be taken as diminishing my hon. Friend's legitimate concerns, but I believe that it is worth putting another perspective. This does not destroy my hon. Friend's argument, but it provides a separate perspective. In a way, that can be used as an explanation of the membership of the industrial tribunals.
My hon. Friend used what would almost call "South Down logic" in saying that balance in the membership of


the tribunal implies prejudice. I would say that balance engenders confidence and that people, because of their work responsibilities, will have differing perspectives. In many cases the tribunal's membership are unanimous. That suggests confidence. If people have differing points of view, it is not normally because of different prejudices, but because of different views on the facts put forward by the tribunal. It is not the case that people who are brought up in the same way, or who have the same training or experience, normally agree with each other. My hon. Friend is not a lawyer; nor am I. We are both personnel people. One cannot get lawyers to agree, especially if they are on different sides in a court case or tribunal hearing. Presumably they have not had the experience of being employers or trade union representatives.
My hon. Friend referred to a union suggesting to a person who had been nominated to be a member of an industrial tribunal that his re-nomination might be at risk if he did not find in a particular way in a certain percentage of cases. That is a serious allegation, which we regard as unacceptable if it can be demonstrated to be general. If people feel that they are being victimised in that way by a trade union or the nominating employers' bodies, I hope they will feel that it is their responsibility to ensure that the information is drawn to the attention of Ministers and, in the case of the TUC and the CBI, to the attention of those organisations.
My hon. Friend spoke about cost. I am not sure whether his figure of £20 million makes allowance for costs outside the public expenditure remit. My information is that the cost of the tribunals is about £13 million at present. We look to those with responsibilities for organising industrial tribunals to try to ensure that we get value for money. We hope that in the courts and tribunals efforts are made to ensure that financial management is regarded as seriously as in the private sector and that equal importance is attached to it.

Mr. Dixon: When the Minister talks about costs, will he bear in mind that he is talking about men's jobs and men's futures? I shall give him an example of what happened to me prior to the establishment of tribunals. I was a member of a safety committee representing employees in a shipyard. I was asked to leave the committee because the foreman wanted to see me. I was sacked two hours later. I had no opportunity to go to an industrial tribunal to put my case. I was put out of the yard and I had no appeal. That is an example of what happened prior to the establishment of industrial tribunals.

Mr. Bottomley: The hon. Gentleman makes a very important point. My hon. Friend talks rightly of employers who are operating on a knife edge and who face being broken financially by going before a tribunal. The hon. Member for Jarrow (Mr. Dixon) rightly observes that employees have been exposed to arbitrary discipline, to injustice, and to unfair dismissal, including when they have been carrying out important work to try to provide physical protection for those working with them. I become upset occasionally when others assume that a Minister,

even in the present Government, is automatically on one side or the other. There is a balance to be found, and where we bring the parties together before an industrial tribunal the balance is usually found.
My hon. Friend talked about time. With the built-in conciliation procedures, some time needs to be taken. One can argue that the conciliation service of ACAS, good though we expect it to be—we hope that it will become better, for there is always room for improvement—is a process that can be described as a talk around a table. Some parties, they are often employers, believe they require legal representation and try to get their legal representatives to talk to the ACAS conciliator. I hope that my hon. Friend and I would say, even if we were lawyers, that both the employee, or ex-employee, and the employer should consider carefully at what stage it is necessary, and whether it is necessary, to bring in legal representation, and whether it is not better to get the parties round the table.

Mr. Gordon Brown: Will the Minister comment on industrial tribunals in the Scottish mining industry? The coal board directorate in Scotland and the rest of the country has refused to give any undertaking that it will reinstate ex-employees if the industrial tribunals find in favour of dismissed miners, and has said that it would probably not reinstate many of them. Will the Minister comment on the position of the coal board as a good employer?

Mr. Bottomley: No, Sir.
My hon. Friend the Member for Langbaurgh suggested that information should be available on individual chairmen. He will know that I cannot, will not and would not provide the information. If it were to be made available in one instance, the same information would be sought on every chairman. We would end up with research students obtaining PhDs and suggesting that there would be a 5 per cent. better chance by avoiding this court or that court. I do not think that my hon. Friend would want what he might regard as excessive statistics. He referred to excessive legalism, and both might go together.

Mr. Holt: I would not want that, but I think my hon. Friend will accept that his reply underlines my contention that every time there is an appearance before a tribunal, there is a game of Russian roulette, and not necessarily fair justice.

Mr. Bottomley: There is some element of truth in that, but that is to be found in any system that is created by man. One can look for experienced interventions and review. With the leading members of the industrial tribunal system, the Lord Chancellor's Department, my hon. Friend's constant presence and genuine concern for these issues and the views represented by the hon. Members for Jarrow and for Dunfermline, East (Mr. Brown), I am sure that we can create a better system. We have a good one, and we can make it work better, and that requires our continued attention. I am grateful to my hon. Friend for initiating the debate. I hope that he regards my response as adequate and that we can continue our discussions.

Cornish Tin Industry

Mr. David Harris: Even at the end of an all-night sitting, and with limited time available, I am grateful for the opportunity to raise what is undoubtedly the most important question facing the county of Cornwall today—indeed, the most important question that that county has faced for a long time—the deep crisis in the tin industry.
It is exactly eight weeks ago today that trading in tin on the London metal exchange was suspended with the price of tin at £8,140 per tonne, whereas at the beginning of the year the price of tin on the exchange had been more than £10,000 a tonne.
The suspension came about with the withdrawal of the buffer stock manager of the International Tin Council from the operation of that market. The price of tin was falling fast and the fear now is that if the market reopened with the buffer stock manager taking part, tin would go into what is colloquially called a free fall and would drop dramatically to an artificially low level. That is the background to the crisis.
Although I have raised this matter on about six occasions, and the hon. Member for Truro (Mr. Penhaligon) has also done so—for example, earlier this parliamentary day, although it was a whole night ago—we have not yet had a statement from my hon. Friend the Minister for Trade. That is through no fault of his. I pay great tribute to him for the patience that he has exercised over this matter and the very hard work that he has put in behind the scenes to try to achieve a solution to an extremely complicated matter.
There are many ramifications to this crisis. There is the question of the international position, and the fact that the International Tin Council now represents only 60 per cent. of world production of tin. There is the European dimension, there are big questions for the City of London and its good name, and there is the question of the liability of Governments to stand behind their commitments under international agreements.
My main preoccupation must be—and I make no apology for this—the effect of this crisis on the tin industry in Cornwall. I am especially worried about the effect on the Geevor mine in my constituency, which has already been mentioned a number of times in the House. Just over a fortnight ago, the Geevor mine, a small public company, served redundancy notices on 340 of its 375 work force. It did so with the greatest reluctance but had to do so because of the crisis hanging over the whole industry. If nothing happens between now and the end of April, those men will be made redundant. That will have an absolutely disastrous effect on the economy of that part of Cornwall. Indeed, west Cornwall is now facing its biggest crisis for many a long year.
Geevor is in the village of Pendeen, some six miles from Land's End. It is beautiful country on the north coast of Cornwall. It is very remote—there is nothing else there other than some farming and some tourism. If, heaven forbid, anything happened to Geevor mine, the economy of Pendeen, the neighbouring town of St. Just—some say the most Cornish of all Cornish towns—and the whole of that area would be absolutely devastated

economically. Male unemployment there is already more than 26 per cent. There is nothing else there to provide jobs.
My right hon. Friend the Minister has tried his hardest behind the scenes to bring about an agreement in the International Tin Council at least to start trading again on the London metal exchange in an orderly fashion. That must be the first priority. However, after the long meetings of the International Tin Council, the signs seem to me, as an outsider who is not privy to all that goes on in those meetings, to be not good. The talks seems to be dragging on and getting nowhere.
I hope that my right hon. Friend will throw some light on the matter. He has made valiant attempts to get a common position inside the European Community with his fellow Ministers, but so far they do not seem to have brought much success. That is not for want of trying by my right hon. Friend.
A few weeks ago, in the presence of the hon. Member for Truro, I took a delegation to see my right hon. Friend from the county council and the mining industry. At that important meeting, we said to my right hon. Friend that we believe that there is an overwhelming case for temporary assistance for the industry to get it through this deep crisis.
Before anybody says, "You did not argue that in the case of the coal industry," let me say that there are great differences between the situation facing tin mines in Cornwall and that facing some mines in the coal industry, although I accept that the social consequences are probably similar. However, we are not talking about mines that have come to the end of their life in the case of the Cornish tin mines. There are good reserves of ore there, and the problem is that if they close they will not open again. The history of the price of tin is one of fluctuation, although it has been ironed out by the International Tin Council in recent years. If those mines closed and the pumps were switched off, it would be like switching off a life support machine, and those mines would not reopen. That must not happen. I do not believe that it will.
There is an overwhelming case for the Government to give temporary assistance to those mines. I believe that the best way is to help them with their considerable development programmes in the same way as the Government rightly are helping the coal industry with its considerable development programme. That is what I am asking for today.
I do not expect my right hon. Friend to come up with an answer or, indeed, to reach for his cheque-book; life is not like that. However, I am saying, as the House prepares to adjourn for the Christmas recess, please do not sit back; please give urgent consideration to the case being made by the industry, the county councils and the district councils, particularly Penwith district, in which Geevor is situated, and St. Just town council.
We are united in Cornwall. I am delighted to say that the argument in support of the industry is solid, going right across the political boundaries. I am pleased that the hon. Member for Truro is here today. I pay full tribute to the role that he has played in the crisis. We are united, but we look to the Government to save the part of the industry that might be in danger, because the signs are not good. I hope that the Minister will be reassuring, but I do not think that they are good. Even if trading in tin is resumed fairly soon on the London metal exchange, parts of the industry will need special temporary assistance. The case for assistance


is overwhelming. Aid can best be channelled through the development programme, which would make the industry more efficient, open up new reserves of ore and, I hope, enable it to compete with the rest of the world when we return to stability.
We look to my right hon. Friend to respond sympathetically to the case being made by Cornwall on behalf of perhaps its oldest industry, which is part of its heritage. The industry must not be allowed to die.

Mr. David Penhaligon: As the hon. Member for St. Ives (Mr. Harris) said, there is no political disagreement on this issue. Our job is to ensure that London is aware of what faces our county.
We all recognise that the world's tin producers have operated a cartel and that the cartel has broken. One of the initial problems after a cartel is broken is that the commodity's price falls way below the marginal costs of production. That presents great difficulty for the industry. It requires much belt tightening and investment. If the price falls dramatically below the marginal cost of production, swathes of our industry are in the greatest difficulty. Indeed, I wonder whether there is any future for it.
I am aware of the international ramifications and of the European role, but the mines are in Cornwall, which is represented here, and we look to the British Government for some assistance. I hope that the Minister does not put off saying whether he will be able to help by saying that we are appealing to the EC, the United Nations or someone else. It is a British responsibility and there should be a British response. I do not expect the Minister to stand up with his cheque book and say exactly how assistance will be given, but he could give west Cornwall the most joy by saying that the Government recognise the problem and, come the crunch, will assist.

The Minister for Trade (Mr. Paul Channon): My hon. Friend the Member for St. Ives (Mr. Harris) and the hon. Member for Truro (Mr. Penhaligon) deserve the congratulations of the House and their constituents on the extreme assiduity and persistence with which they have pursued this important subject, the crisis in the tin market and the difficulties that have arisen with the international tin agreement.
The House will appreciate that, at this very minute, the International Tin Council is in session in London, so I hope that hon. Members will understand if I am cautious about what I say about what might or might not be the outcome of any talks. The United Kingdom has been a member of successive international tin agreements since 1956. The current agreement—the sixth—came into force in 1982. Like previous ones, it provided for the International Tin Council to engage in buffer stock operations—buying and selling tin—to keep tin prices within an agreed price range. It was a commodity agreement with full economic provisions and was due to expire in 1987, but it could be extended up to two years. Its purpose was to maintain the price within a given range. Buffer stock was therefore established and a buffer stock manager operated a system of intervention buying and selling to keep the price within that range. The agreement

has had the difficulty from the start that the price range seems to have been always higher than that which might have been set by a free market. Therefore, production has been stimulated, consumption has fallen, and large stocks of tin have accumulated, despite export controls in some producer member countries. It is a case of over-supply.
On 24 October the International Tin Council announced that it no longer had sufficient funds to continue buffer stop operations. The London metal exchange later announced the suspension of dealing in tin, and since then it has remained closed. From the outset the Government have made it clear that our overwhelming priority is to secure agreement to a satisfactory resolution of the ITC's obligations, and to get a return to ordinary trading in tin. That must be in everyone's interests.
My right hon. and learned Friend the Secretary of State has repeatedly stated that the Government remain fully committed to meeting their share of any commitments of the council member countries. He has used every conceivable channel open to him, diplomatically, through the Community, and in every other way, to impress on other members of the ITC that that is the case, and that they should adopt the same position. His proposals are still under consideration in the ITC, and we are pressing other council members to follow his lead on financial obligations.
The present meeting, which began on 2 December, will remain in session until definitive decisions have been taken. I hope that the House will understand if I decline to comment on the progress of those discussions, as we do not wish to prejudice the chances of a successful outcome. The task is extremely difficult. The United Kingdom is one of 22 members of the international tin agreement. It has been suggested that the ITC should be enabled to recommence its buffer stop operations to protect the interests of poorer countries which are particularly dependent on sales of tin, and the Cornish tin mining industry. Our priority is to secure the agreement of the member countries on an equitable way of settling the council's obligations. It is premature to discuss any future arrangement until we have agreement on what should happen now, and until an agreement has been reached. However, it is difficult to envisage that it is likely that we shall find an agreed basis for the renegotiation of the agreement in future.
I agree with my hon. Friend and the hon. Gentleman that the matter is tremendously important to Cornwall and those who live and work there. There are only three main tin mines, as I understand it. My hon. Friend referred to Geevor and the hon. Gentleman has talked about Wheal Jane and South Crofty. About 1,520 people are directly employed in tin mining. The figure includes the three mines and smaller mining activities. Other people are indirectly employed. We are fully aware of their great anxiety.
I had the opportunity to meet members of Cornwall county council with my hon. Friend and the hon. Gentleman. It is too early to judge what impact recent developments will have on the commercial prospects of United Kingdom tin mining. The most important factor will be the price at which tin settles when orderly trading has been resumed. The hon. Gentleman is right in saying that if we have a hard landing, it is likely that the price of tin will fall lower than if there was a soft landing.

Mr. Gordon Brown: Will the Minister respond to calls from companies and trade unions in the Cornwall area for a capital injection? Will he delay a decision on this beyond the point at which many people may be made redundant?

Mr. Channon: Of course, no decisions will be delayed beyond the point at which decisions would be too late. As my hon. Friend the Member for St. Ives said, we have a little breathing space. We cannot foresee what the position will be when ordinary market trading resumes, but we are monitoring it extremely carefully, and we shall continue to listen to the views of all those with an interest in the well-being of the Cornish industry. I have taken full note of the views of hon. Members on both sides of the House, and the views of the hon. Members who visited me recently with representatives of the Cornish industry. I hope that my hon. Friend and the hon. Member for Truro will remain in touch with me. The position will be much clearer in a few weeks, if not days, when the International Tin Council concludes its deliberations. I shall take every care—
It being Nine o'clock am on Thursday, the motion for the Adjournment of the House lapsed, without Question put.

Maternity Provision (Greater Glasgow)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]

9 am

Mr. Norman Hogg (Curnbernauld and Kilsyth): We have reached the end of a long day and what seemed an even longer night. Throughout the Consolidated Fund debate, we were assisted by the Clerks and the staff of all the Departments of the House. It would be right to place on record the grateful thanks of Members for that help.
I am pleased to see with us this morning my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), my hon. Friend the Member for Dunfermline, East (Mr. Brown), and my hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton), who has shadow responsibility for the Health Service. I am also pleased to see my hon. Friend the Member for Jarrow (Mr. Dixon), who has a keen interest in Scottish affairs.
I am grateful for the opportunity to raise on the Adjournment the important issues surrounding the proposal of Greater Glasgow health board to close Stobhill hospital maternity unit. Ministers frequently refer to spending limits within the Health Service, and claim that more money in real terms is being spent. "Safe in our hands" is their favourite slogan. Why then do we keep hearing of hospital closures? Why then are hospital closures such a feature of Adjournment debates in this House? Why then is the Greater Glasgow health board having to slash its services by £13 million, and why is Stobhill maternity unit on skid row?
Last year, there were 2,000 births at Stobhill, but the board says that the unit is under-used. It is certainly not under-used by my constituents. That is amply demonstrated by the Minister's replies to two parliamentary questions that I tabled. He said that the number of patients from Cumbernauld who were discharged from Stobhill maternity unit during the past five years were 461, 620, 532, 518 and 510. The figures for Kilsyth were 181, 188, 172, 176 and 142. There can he no question of the unit not being used by my constituents. Kilsyth has a long tradition of using Stobhill maternity unit, and the community council in the town pointed this out most forcibly to Councillor Tom Barrie and myself. Cumbernauld new town is a young community with an average age of 31, which needs and uses the unit.
This unit enjoys a reputation for progressive and forward-looking maternity care. It fulfils all current NHS recommendations for modern obstetric practice. It is an integral part of a general hospital with full laboratory, anaesthetic and surgical facilities. It is a teaching unit giving a combined training for doctors of obstetrics and gynaecology in health centres. It deals with one quarter of all medical undergraduates at Glasgow university. All this, yet perhaps the high levels of efficiency achieved at the unit have contributed to it becoming a target for cuts. It was an 85-bed unit, which was reduced to 65 because of the excellent day care provided for expectant mothers, which reduced the necessity for 24-hour bed care. The latter has been of particular help to the mothers and families alike.
The economics of the proposed closure requires greater scrutiny. The board says that it will save £1 million on Stobhill hospital, yet the 2,000 patients will have to go somewhere—possibly Monklands general hospital will


cover Cumbernauld, and Kilsyth will be served by Stirling or Falkirk. Such provision would not be acceptable to my constituents. It would be extremely awkward in travel terms, involving costly journeys, and would be extremely inconvenient for the expectant mothers. To be plain, Kilsyth and Cumbernauld cannot do without the Stobhill unit, and I am sure that is equally true of northern Glasgow, Bishopbriggs and Kirkintilloch.
I have already pointed out that a large number of the patients come from Cumbernauld new town, and the unit has a direct relationship with Cumbernauld's central health centre, where a specialist ante-natal clinic is provided. Kilsyth has a similar service, provided twice a month. Were Stobhill to close, the service to my constituents would be drastically reduced. A hundred highly skilled people would either lose their jobs or be transferred. A highly efficient team would be broken up and lost to the Health Service in Glasgow. Cuts of the kind proposed reveal the awful consequences of Government policy. How far removed from reality is the easy rhetoric of Ministers. My constituency is at one in condemning this proposal. Kilsyth community council, Cumbernauld and Kilsyth district council and myself, are utterly opposed to the proposed closure, and we urge the Minister to ask the Secretary of State to withhold his consent from the board's proposals. Instead he should make further financial provision to the Greater Glasgow health board so that this facility can continue its excellent service to my constituents.

The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): I have a distinct feeling of déjà vu about this debate. The hon. Member for Cumbernauld and Kilsyth (Mr. Hogg) and I faced each other across the dispatch box in very similar circumstances and at the same hour of the night—or morning—in July of this year. On that occasion, the subject chosen by the hon. Gentleman related to the acute hospital services provided by the Greater Glasgow health board for residents of the towns of Cumbernauld and Kilsyth which the hon. Gentleman represents but which are situated within the area of Lanarkshire health board. If my memory serves me right, our previous debate rather concentrated on the service provided by the Glasgow royal infirmary.
Although the subject of today's debate is maternity services in Greater Glasgow, the hon. Gentleman's particular interest is the maternity service provided by Greater Glasgow health board to residents of Cumbernauld and Kilsyth. There are aspects of the debate which we had in July which are relevant to today's debate and to which I shall return later in my speech.
I would not, however, wish to draw too close a parallel with the debate in July since the subject of today's debate raises a number of separate and specific issues which, given the current widespread concern about the future provision of maternity services in Glasgow, it is only right that we should have the opportunity to debate and set out for the record.
To begin with, it might be helpful to describe briefly the current provision of maternity services in Greater Glasgow. Maternity services cover, of course, the primary care sector, the community care sector and the hospital service. While much of the current attention focuses on the

last of these, it is important to recognise the substantial contribution made to the health and welfare of expectant mothers and their babies by general practitioners and by the community nursing service. There have been significant improvements in the perinatal mortality rates in Glasgow during the last few years. Everybody can be rightly proud of those improved rates. For example, in 1975 the perinatal mortality rate was 22·5 per 1,000 births. By 1984, it had been reduced to 10·2 per 1,000 births. This is a considerable achievement for the Greater Glasgow health board, and credit for the successful implementation of these measures must go to the doctors and nurses working in and with the community as well as in the hospitals.
The hospital maternity service does not, of course, operate separately from the community maternity service and it is self-evident that there must be close co-operation between the two, and, indeed, as full an integration of them as possible. Here again I would mention the practice of the Greater Glasgow health board of setting up antenatal clinics in some of its more deprived peripheral housing estates staffed by hospital-based doctors and nurses. I think it is again worth our taking the time to recognise and applaud such service developments which have played their part in the reduction of perinatal mortality.
I turn to the hospital services in Greater Glasgow. There are five maternity units in the board's area—the Glasgow royal maternity hospital at Rottenrow in the east of the city; the Queen Mother's hospital at Yorkhill; Stobhill hospital to the north of the city; Rutherglen maternity hospital and the Southern general hospital, both serving the city's southern parts. Together, these units provide a total maternity bed complement of 557, and in 1984–85 the total average number of these beds, staffed and available for use, was 524. In the calendar year to 31 December 1984, there were 15,189 deliveries at these hospitals, with the largest number—4,000—being at the royal maternity hospital at Rottenrow and the smallest—2,100—at the Stobhill maternity unit. These figures reflect to some extent the relative sizes of the units.
Of the 15,189 births in the Greater Glasgow hospitals in 1984, some 1,650, or 11 per cent., were to mothers resident in Lanarkshire. This reflects the general pattern of health care in that part of Scotland to which we referred in our July debate and to which the hon. Gentleman referred earlier—the historical and continuing practice of hospitals in Glasgow providing a service to nearby centres of population in immediately adjacent health boards, notably in Lanarkshire. Of the 1,650 births in 1984 to Lanarkshire mothers in Glasgow hospitals, 656 were at the Rutherglen maternity hospital; 440 at the Stobhill unit; 430 at the royal maternity hospital; 94 at the Queen Mother's hospital; and 30 at the Southern general hospital.
This cross-boundary flow of patients is of course a common feature of the Health Service and the receiving health board is suitably reimbursed for the additional work load created. Here, however, I should like to pick up a theme from the debate earlier this year to which I have referred: the importance of close co-operation between health boards in such matters so that as full and complete a service as possible is provided to all patients, irrespective of their place of residence, and in the way most cost-effective to both boards. So far as I am aware, there has been very good co-operation and understanding between the Greater Glasgow and Lanarkshire health boards in the


provision of maternity services across their administrative boundary and it is most important that this should continue. I am sure the hon. Gentleman would wish to acknowledge in particular the important and positive role which the Greater Glasgow health board has played in the provision of maternity services for his constituents in Cumbernauld and Kilsyth.
It is of course the future provision of these services that concerns the hon. Gentleman. Indeed, in a wider context it concerns a number of Opposition Members who represent Glasgow constituencies, and also my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst). They have indicated to me their concern about these services. It may be helpful at this point to explain some of the background to the current proposals by the Greater Glasgow health board to rationalise its hospital maternity services by the closure of the unit at Stobhill general hospital.
The Greater Glasgow health board's net revenue allocation for 1984–85 was £343·9 million and for 1985–86, £359·2 million. The board announced earlier this year that it was facing a £9 million budgetary deficit for the current financial year and a possible £13·5 million budgetary deficit for next year, 1986–87, although I have not yet announced the allocations to boards in 1986–87. It is most important to recognise that this arose not from any financial cuts imposed on the board but from the realisation by the board that if it continued its existing spending patterns it simply could not live within its means. Some hon. Members have commented that these budget deficits arose from the effect of the pay awards this year for doctors and nurses. This is not so because, as a result of the Government's deliberate staging of these awards, their net effect on Greater Glasgow's budget in each of the years in question is considerably less than the budget deficit figures that I have quoted.
The prospect of these budgetary deficits led Greater Glasgow to seek measures for generating savings through increased efficiency and through possible rationalisation of services. It was not simply this short-term crisis, however, that prompted the board to look at such measures. The board is well aware of the considerable improvements which are increasingly becoming necessary in its long-stay hospitals, for the elderly, whose numbers are as a proportion of the total population increasing, for the mentally ill, who for years have been accommodated in aging Victorian buildings which are more and more becoming substandard and for the mentally handicapped who, in Glasgow, are almost all accommodated in one single institution at Lennox castle.
To give credit to the board, it has in recent years been progressing a number of major projects in the psychiatric field—a 240-bed redevelopment at Lennox castle, a 120-bed development at Gartloch, a 120-bed development at Parkhead and most recently a prospective 240-bed development at Rutherglen. These are significant advances, but much remains to be done, particularly north of the river Clyde. All these developments require revenue resources to staff and operate them and the board is aware that while it can expect to continue to receive growth money in its annual allocations it will require to supplement this by finding resources from its existing allocations as a result of its very favourable funding position at present. Indeed, the board is the second best funded board in Scotland by reference to the objectively based assessment of relative need provided by the SHARE

formula, introduced by the Labour Government. For the present year the board is about £16 million better off than it would be were the resources allocated purely according to this assessment. In the years to come, however, the board is aware that it will gradually lose this advantage as funds are increasingly directed to the relatively under-funded boards. Ayrshire and Arran and Lanarkshire are but two of them in close proximity to Greater Glasgow.
At the same time, it is also well known that Greater Glasgow has some of the highest cost acute hospitals in the country, even comparing teaching hospital with teaching hospital. This results in part from the higher level of doctors and nurses which the board has maintained despite the constant fall in the size of population which it serves. The board recognises that it is time that the running of these hospitals was examined to find out why they should be so much more costly comparable hospitals elsewhere in Scotland.
All these factors have contributed to move the board towards a programme of efficiency savings and rationalisation within its acute services sector which, for this purpose, includes its obstetric service. The package of savings that it has devised amounts to a maximum of £13 million, though there may well be further potential savings available within the board's operations which the board will have to continue seeking, both to secure maximum efficiency in the resources it uses and to redirect such savings into the areas of patient care which I have outlined and where improvements are very much required. Of the present package, however, most of the savings proposed are in the main acute hospitals where an analysis of staff costs, supplies costs, and total costs per patient has revealed significantly higher figures than in comparable hospitals elsewhere in Scotland.
A further element of the package, however, and the one which concerns hon. Members is the proposed closure of the Stobhill maternity unit, with a possible overall expenditure saving of about £1 million per annum. I will explain why the board is considering this possibility.
I mentioned earlier that during the financial year 1984–85 there were on average 524 maternity beds staffed and available for use. On average, however, only 368 of these beds, or some 70 per cent., were occupied, and the maximum occupancy achieved in that year was only 440 beds, or 84 per cent. In other words, even on the day of maximum occupancy, there were 84 additional beds available and fully staffed but not in use. Compared with the official bed complement of 557, the discrepancy is even greater.
Against those figures and against the general background that I have described as to Greater Glasgow's budgetary position, it must be entirely understandable to all concerned that the board has some scope for efficiency savings here. It is simply a waste of resources to staff beds which are not required, and particularly when the resources so used are desperately needed elsewhere in the board's services.
The board's specific proposal, as I understand it—and I have yet to see it formally—is to close the inpatient accommodation at the Stobhill maternity unit. This unit has a notional bed complement of 83 beds. In 1984–85, it had an average of 65 available staffed beds with an average occupancy of 40 beds. This represents 61 per cent. of staffed beds, and less than 50 per cent. of the notional bed complement.
On the basis of the current bed usage figures for the area as a whole which I quoted earlier, the board should be able to withstand such a closure and provide alternative accommodation on the 84 unused beds at the four other maternity units in its area, presumably at the Royal Maternity hospital if at all possible, as that is closest to the population in the north of the city which the present Stobhill unit serves.
If this closure went ahead, it would, as the hon. Gentleman explained, have a major effect on the maternity service provided by Greater Glasgow health board for the residents of Cumbernauld and Kilsyth. Clearly, this is a case where my right hon. Friend and I would expect the Greater Glasgow health board to consult closely with the Lanarkshire health board to find the most acceptable alternative service which can be provided. Indeed, I understand that preliminary discussions have already been held between officers of the two boards.
But such discussions will be only part of the much wider consultation which Greater Glasgow is obliged to undertake in consequence of the well-established procedures where a closure or major change of use is envisaged. The great merit of these consultation procedures is that they give all parties or individuals who may be affected by the proposed closure or change of use the formal opportunity to express their views on the proposal in the light of the consultative document which the board must issue.
That consultation document will have to set out clearly the reasons for the proposed closure and the alternative services which the board proposes to provide in place, in this case, of the Stobhill maternity unit. The Greater Glasgow health board has yet to issue its consultative document, and in many ways it is premature to discuss the issue in detail until the board has set out its case fully. I urge hon. Members, therefore, to wait until they have seen the consultation document before coming to a final view on the merits of the case. I urge hon. Members, having read the document, to take the opportunity provided by the consultation exercise to make their observations directly to the Greater Glasgow health board. The same applies to anybody else who feels affected by the proposed changes that the board will make in the consultative document. When the board has received all the responses to that document, it will again consider the matter, and if the board decides to proceed it must come to my right hon. Friend, and that is the other purpose behind the consultation exercise.
Before any board may proceed, it has to come for approval to my right hon. Friend and I. In making a decision, my right hon. Friend and I take fully into account

the result of the board's consultation exercise so that the consultation process and the responses to it are not only useful for the board in coming to its decision but, if it decides to continue with its closure decision, the consultation exercise is useful to my right hon. Friend and I when we come to consider whether we should agree with the board.
The hon. Gentleman has raised a number of detailed points about the effect which possible closure of Stobhill would have on his constituents. I hope that he will accept, in the light of the formal position held on this matter by my right hon. Friend and I, that it would not be proper for me to comment on the merits of the board's proposals. In this speech I have sought to avoid comment on that for the very reason that eventually my right hon. Friend and I will have to decide. But I have tried to explain some of the factual background which has led up to the board's proposal.
Maternity provision throughout the country is facing the same sort of problem because with falling birth rates and improvements in maternity services leading to shorter stays in hospital by mothers after the birth we are seeing a lot of surplus capacity in maternity services in many health board areas. I do not think that there is one health board that does not have an imbalance in its maternity service, with more beds than its maternal population demands. There is spare capacity. It cannot be anything other than right for health boards to look at that spare capacity and to ask themselves whether they really need it because the resources which are going into those unused beds and facilities could be used for other patients who need services. I mentioned earlier the care of the elderly, the mentally handicapped and so on.
I should like to assure the hon. Gentleman and all other hon. Members concerned in the matter that my right hon. Friend and I will give close attention to their responses to the Greater Glasgow health board's formal consultation document before we reach any decision on the matter. In view of the considerable concern which the issue has aroused, I am grateful to the hon. Gentleman for giving me the opportunity to explain some of the background to the board's proposal even if, as I say, I cannot comment on the proposal at present and at this early stage in the board's consultation process. But I can assure him that I am more than mindful that it is not just the patients of the Greater Glasgow health board area who 1are affected by the proposals, but also the patients in Lanarkshire health board Area. All those matters will be taken into account by the board, in conjunction with Lanarkshire, and also by my right hon. Friend and I if the decision comes to us.

Question put and agreed to.

Adjourned accordingly at twenty-seven minutes past Nine o'clock on Thursday morning.